Nonprofit Budget Surplus, a Rare Dilemma

Use this unexpected boon to strengthen your organization!

The words “surplus” and “budget” don’t often apply to nonprofit organizations. On the off chance your fiscal year is ending and you find that the planets have perfectly aligned to leave you with a plethora of cash, it’s time to develop a smart spending plan. The term “use it or lose it” applies to lots of things from airline miles to cheese, and it definitely applies to your end-of-year nonprofit budget. You need to spend the money because if you don’t it may get cut from your budget next year. Budget surpluses don’t always happen in the nonprofit world, so if you find yourself with a leftover budget, you’re allowed to be gleeful. Still, avoid going crazy like it’s Black Friday.

Whatever you do, don’t let it go to your head. Don’t be penny wise and pound foolish. Instead, engage your board in conversations with the executive director to determine the best ways to spend your end-of-the-year surplus. Your decisions will naturally hinge on how much you have to spend. Always approach this situation as using the extra money as an investment, not a spend. Here are some great ideas to carefully consider.

How To Invest your Surplus

Invest in Training

You’ve likely never had the nonprofit training budget you want for your staff, so consider sending your employees to conferences, seminars, classes and online training. These are prime opportunities for learning best practices, current trends and important techniques for your organization. They’re also great network building opportunities. Plan ahead so employees can factor the training into their schedules, and take advantage of early bird registrations to stretch your dollars even further.

RELATED: Why Nonprofit Boards Need Thought Leaders

Invest in Tools

Perhaps there is a great software or other tool that would really help your nonprofit save time or develop some much-needed automation. Think about using your remaining budget to upgrade software or purchase services that would propel your mission forward or free up precious staff time to focus on other more important tasks. Think about buying that accounting, marketing or project management software you’ve had your eye on for a while now.

RELATED: Modern Nonprofits: 3 Ways to Be a Board Change Agent

Invest in Infrastructure

You might need to make infrastructure improvements. Perhaps those rickety chairs are just not cutting it, or you could all really use new computers, monitors, printers, phone system and other IT equipment. If your nonprofit organization is expected to grow next year and you’re going to be hiring, think about using the surplus to make infrastructure purchases to plan for growth.

nonprofit board engagement

Invest in Marketing

Nonprofits constantly struggle with wanting professional marketing, but only having a shoestring budget. Think about using your surplus to produce some quality “slick” content or to finally build your social media presence. This one is tricky because you need to make sure you can continue most semblances of your marketing campaign next year, even if you don’t have the budget.

Invest, Don’t Spend

Having money leftover is a nice “problem” to have. At first, you might consider it a pain, because now you’ve got to spend time on figuring out how to use it or lose it. Use your end-of-the-year budget on something worthwhile. Plan first, then spend. Don’t rush it, and be thoughtful about how this extra money will advance your organization. It is also critically important that you review last year’s budget to determine whether you need to make adjustments in next year’s budget. Evaluate your previous year finances—how did you end up with a surplus, and how does that affect next year’s plan. Where did you spend the most money? Where did you spend the least money? What costs can you cut? Looking back at your budget now will go a long way to help you look forward to your organization’s nonprofit mission.

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