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The Role of the Board in Nonprofit Budget Making

Role of the Board In Nonprofit Budget Preparation

What is the role of the board of directors in the preparation of the nonprofit budget? That’s not an easy question to answer! In a large, well established nonprofit, the CEO and the CFO begin the process and bring a draft budget to the board for discussion and approval. However, in smaller nonprofits, the staff may lean on the finance committee of the board to assist in preparing a draft budget. At any rate, there are discussions that the board needs to have as the nonprofit budget is prepared.

the role of the board of directors in nonprofit budget preparation

Are board expenses in the budget?

Boards of directors have expenses that may need to be included in the preparation of the budget. For example, are there board members responsible for fundraising events? Those board members should prepare a budget for each event to account for the sizable investment of funds needed BEFORE the event. Having funds set aside for the deposits with venue and caterer can require a substantial outlay of funds and must be part of a plan.

Other committees of the board may have expenses to consider as well.  Is the Governance Committee planning for off-site board retreat? Are there board members who are retiring from the board that the board would like to recognize with a reception and a token of appreciation? Does the Finance Committee want an outside financial review or a full audit in the coming year? Of course, discussion within each committee of the board should include what expenses they anticipate in the next budget period.

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What about technology and software in a nonprofit budget?

Nonprofit staff are so used to “doing more with less” that improvements that make a difference in efficiency get postponed or neglected. Is there a need for improved hardware? Who is using a dinosaur of a computer that should have been replaced years ago? Unfortunately, sometimes it takes the board to endorse improvements that hard-working staff need but might not suggest for themselves.

What software does the nonprofit need? Boardable can give hours back to the administrative staff who must prepare and send out board packets and agendas. Boardable also makes life easier for board members. Everything is in one place for board members to access before a meeting. That kind of time savings means saved money and energy!

Is there donor management software that would be helpful to the development staff? Obviously, that management software can help in tracking donations, preparing communications to donors, and making online giving easier. Making sure that the nonprofit supports efficient use of staff time may require using the most current software.

Someone on the board or staff should calculate all the small monthly software subscriptions that can go under the radar. This is also a great time to assess if the board wants to continue using those programs. You may find savings in the nonprofit budget by cutting five twenty-dollar-a-month software add-ons.

Checks and Balances

The board and staff work together to prepare, discuss and approve a nonprofit budget. The overall consideration is to make sure that everyone is clear what the strategic plan requires to move the organization forward. Plans require commitment and funding. Ultimately, the board and staff partner to provide the resources needed.

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