Getting out of the messes of typical budget procedures and protocols for sound organizational management and governance will take some doing. Organizations are notorious for doing things how they have always been done or have been seen to be done in other organizations, and budgets are often subject to some pretty typical politicking.
Instead of fighting over numbers, budgets can become a helpful tool in leading an organization to meet its desired goals, objectives and outcomes.
If the governance arm of the organization (the board of directors, and in some organizations, the membership) can begin the budget conversation before it sees a budget presentation, it can help shape what an approvable budget is, and reduce the drama significantly. That, coupled with adequate delegation to staff and/or volunteers can dramatically improve organizational performance.
Start with what outcomes your organization wants to produce: what will your community look like? Families? Individuals? The country? The world?
Then, set priorities for how much of your organization’s money is spent on each of the outcomes. Along the way, develop values for how your organization will operate in pursuit of those outcomes. Define the compensation for the senior staff person.
Determine where the no-go territory is: for instance, that expenditures not exceed revenues, or that key programs not be cut without a six-month notice.
Finally, define a list of budget boundaries based on what you have developed so far, in “not” language. Delegate this to staff who will develop the full budget based on the criteria. Commit the governing group to measuring the finished product only by whether the budget reasonably fulfilled the criteria. If the criteria need to be refined, refine them and allow the budget to be re-worked without finding fault.
Doing this will help keep your organization thinking to the future financially and move it out of the usual and customary disengagement mixed with micromanagement.
Design Group International consultant Matthew M. Thomas can assist your organization in setting up healthy budgeting. Click the link below to contact Design Group International and get the conversation started!