Balancing the Budget with Fundraising

Running a nonprofit can be a lot like watching a funnel drain: you strive to get as many resources as you can from a variety of different donors only to have it continually drained. With everything happening so fast and the needs being so great, who has time to balance a budget, implement a fundraising strategy and keep track of bookkeeping?!

A new report released Wednesday by the Center on Philanthropy at Indiana University found that mid-sized nonprofits with revenues ranging between $1 million and $5 million were lacking in financial knowledge and cash reserves. “While 76 percent of the respondents said that they were financially literate, only a third were correct when quizzed on their financial knowledge,” states Chicago Tribune reporter Corilyn Shropshire.

More than 500 nonprofit leaders were interviewed in this survey from causes ranging from education to human services to the arts. Those participating were asked questions involving bond prices and interest rates, investment risks and diversification of funds. Shropshire explains, “According to the study, financial literacy increased in conjunction with the organization’s budget. In other words, nearly 45 percent of nonprofits answered all three questions, compared to just over 26 percent of non-profits with budgets less than $5 million.”

A quarter of those surveyed said they had four to six months of reserves on hand while almost half of these mid-sized nonprofits had less than three months’ worth of operating expenses available for times when they spent more than they brought in. Furthermore, as demands are increasing on many nonprofits, they realize that breaking even is no longer the goal. Long term planning is a must to continue to meet the needs of their clientele.

One solution for these nonprofits is to establish a strong online fundraising platform. Connecting to donors and supporters through social media networks not only can bring in additional funding, but it is also a great way to connect with people who may have the financial expertise to help stay within the budget and create a long term financial plan. Fundly can help you reach present and potential supporters using the internet so you can get one step closer to reaching your goal: improving the lives of others.