Budgeting for Not-For-Profit Organizations

Budgeting for Not-For-Profit Organizations

Budgeting for Not-For-Profit Organizations

Budgeting for Not-For-Profit Organizations

Synopsis

A well-functioning budget process is more than a set of procedures--it provides a focus for the organization and management to analyze key financial and strategic issues. This invaluable reference addresses the fundamentals of managerial incentives, resource allocation, and practical ways in which these incentives can be managed to serve the strategic goals of the organization by taking an in-depth look at the principles of budgeting for not-for-profit organizations--higher education, charities and foundations, religious organizations, and hospitals and healthcare organizations.

Excerpt

The budget process can provoke very different and conflicting reactions. It may seem an obvious principle that budgeting is a critical discipline for bringing order to an organization. However, once inside an organization, the budget process may seem irrelevant and intrusive to effective management, even taking managers away from running departments and programs and tying them up in meetings and paperwork that have the same end result: admonitions to do more with less than is needed.

The frustrations with the budget process vary with the organization. A small organization may be very dependent on a few grants. If those grants come in, the money will be spent and programs will be offered; if not, the organization will scramble to find the cash each month to pay the rent and meet the payroll. Advanced financial planning and budgeting seem irrelevant. In larger organizations, money may be more accessible, but central officers who make decisions on who receives funding may prefer certain departments or programs or may be forced to fund certain operations.

In spite of objections to the process, budgeting is fundamental to management. It is one of the best tools available to focus and coordinate an organization. When the process is well designed and administered with political sensitivity, it provides an effective vehicle for decision mak-

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