Using surplus budgeting to advance and sustain your mission
Surplus budgeting tips
Bob Mims, CPA, CGMA, a consultant and a member of FASB's Not-for-Profit Advisory Committee, said not-for-profit organizations that wish to implement surplus budgeting can take these steps:
- Analyze your organization and know your financial situation. Take an inventory of your unrestricted net assets.
- Educate program, fundraising, and administrative groups about the balance sheet, components of unrestricted net assets, and unrestricted revenues and cash flows.
- Align every part of the organization, every volunteer, and every staff member around the financial goals, and develop consensus on the budget surplus goal amount.
- Reduce functional silos so that everyone understands the goals and appreciates that sustainability is needed to achieve the organization's mission.
- Develop a strategic plan, a business plan, and operating budgets to support the plans.
- Keep an eye on reserves and have a strategy to "right the ship" at any point.
- See more at: http://www.journalofaccountancy.com/issues/2017/feb/using-surplus-budget...
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