The following blog post is the fifth in an 8-part series on inflation. To see the previous post, click here. To see the next post, click here. If you would like to download the entire document, please click here.
Consider adjusting the annual budget to reflect the new situation.*
Have you ever heard this response when asking about spending money, “Well, it’s in the budget.” These 4 words probably cause more money to be spent than any other. Yes, a budget is important and does provide guidance on expenses. However, in challenging times, expense judgment is warranted.
The recent pandemic and economic uncertainties have highlighted the importance of being able to pivot and make strategic decisions in the face of unforeseen circumstances. One area that may require your attention is your organization’s annual budget.
- Review your budget regularly: Don’t just set your budget at the beginning of the year and forget about it. Review it regularly to ensure that it is still on track and accurately reflects your organization’s needs.
- Adjust your budget as needed: If you see that inflation is affecting your organization’s finances, make adjustments to your budget to ensure that you have the resources you need to continue your work. This may involve finding new sources of funding or cutting expenses in certain areas.
- Communicate with your team: Keep your team informed about any budget adjustments and the reasoning behind them. This will help ensure that everyone is on the same page and working towards the same goals.
- Consider the long-term: While it’s important to respond to immediate needs, it’s also crucial to think about the long-term sustainability of your organization. Consider how inflation may impact your budget in the future and plan accordingly.
Inflation can be a daunting challenge, but with careful planning and regular review, you can ensure that your organization’s budget remains robust and able to support your mission. By staying informed and being proactive in your financial planning, you can position your organization for success in the face of uncertainty.
Click here to receive the downloadable version of this blog series
Click here to read the next blog in this series
Click here to read the previous blog in this series
Click here to listen to the accompanying I 501(c) You – The Podcast For NonProfit Board Members episode
*Portions of each blog in this blog series were written with the use of artificial intelligence.