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Budget assessments are critical to nonprofits as they provide a look into the financial performance of your organization.
Depending on what your assessment brings to light, you’ll either make a budget revision, amendment, or develop an entirely new budget.
We've listed the three scenarios below.
Revisions to the Budget:
Revisions are small changes to the budget. Even if your budget is performing as planned, an adjustment could be made to help boost your financial performance through the rest of the year.
Amendments to the Budget:
If your organization is going to fall short of goals or not meet the forecast that was planned, then it's time to amend the budget. It is likely that the Board of Directors will need to be brought in to help review the bylaws of the organization and for approvals.
Common budget amendments are:
- Seeking additional sources of funding.
- Delay or postpone program expenses until the following year.
- Create a plan for new gifted assets or fundraising dollars to aid in the relief of the budget.
Create a New Budget:
A new budget might need to be created if you organization has significant changes to programs, mission, or strategy. You should only consider this process when internal or external changes extensively affect overall operations.
This process will require the Board of Directors review and approval.
Budget assessments should take place often throughout the year to make sure no surprises arise.
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