Now that you have developed ways to have insight into your expenses, we can start looking ahead. It is good (great, even!) to have insight into what you spent, but remember, this is the past you’re looking at. And you also need to look at the future. What resources do you need to implement your plans according to your timeline? So let’s see how you can look ahead at your planning and expenses.
Why is it important to know the resources you need?
You may ask, why do I need to look ahead at my expenses in addition to my work plan? There are several practical reasons why this can be important to you.
Preparation of planned payments
For instance, if you need to prepare cheques or other payments in advance for an event, and if you need authorization or help from others in the organization. Or maybe you need to go to the bank, in another city.
Timely requests for donations in kind
Maybe you need specific in-kind donations for an activity you are planning. It will be good to know ahead of time whether your stock is sufficient for the activity. So that you have enough time to approach your sponsors or private donors with a request if you do not have sufficient stock on site.
The same can be true of money, of course. Do you have enough money on your bank account to pay for the planned activities? If not, what are your options? Can you ask for an advance payment from a donor? Can you do a quick campaign to raise money? Can you postpone the activity? Can you pay part of the costs later? Can you do the activity cheaper? Etc. etc.
So now you see…
So you see how knowing the planned expenses may actually impact on your work plan and the order to actions to be planned.
How to get started
So it all starts with your work plan: your time line of things you want to do to achieve certain results. If you are clear on what you need to do when, you can start forecasting what resources you need by period, for instance week by week, or month by month.
Identify the resources you need
When you are forecasting the resources you need, think of: people (time!), in-kind donations that you use for your activity or for your operations, and of course also money needed for payments. Be precise in what items you need. Whose time do you need when? What in-kind donations do you need for you activity? What are items you need to pay for?
Calculate amounts by period
For each item, list the number of items you need. And define the cost involved per item. Be as precise as you can. And take time to check if needed. For instance, maybe you can negotiate a reduced price if you need to buy more items.
Make sure your costs estimate list is based on the same periods as your activity timeline, so by week or by month for instance.
Check for each period specifically
Check for each period whether you are likely to have the needed resources available or not. Will team members be on leave? Will your sponsors send a new batch of in-kind donations before the start of the activity without prompt? Do you have enough money in the bank to pay for the items you need to pay for?
Adjust your work plan
Based on your findings, you may want to adjust your work plan. Maybe you want to add actions, like reaching out to the sponsors and private donors who provide you with in-kind donations. Or perhaps you need to reschedule the activity because key staff will be away on maternity leave or annual leave? Perhaps you will add a task to prepare an interim report for a grant-making donor so that they can send you a new instalment of the grant. Or you may downscale the activity to make it cheaper and more feasible to do. Etc. etc.
My key tips
- If you know in advance where bottlenecks may impact your plans, you have plenty opportunity to avoid running into these bottlenecks.
- Visualize your activities as precisely as you can, to be sure your list of resources includes all resources you need. (don’t forget time of support staff, or office supplies, etc. etc.)
Want to know more and ask questions?
If you want to discuss this more – jump into my nonprofit support community and get input from a wide range of peers and from myself!
Here is how you can join my free nonprofit support community
You can join my free nonprofit support community on the Heartbeat platform here. This group is a safe space for open exchange and discussion on potentially sensitive topics like boards, nonprofit management, fundraising, etc.
You can visit the community via a browser or via an app. Here is the link to download the Heartbeat chat app in the Google Play store.
How I can help you
Here is how I can help you set up your nonprofit finance and admin professionally so you can stop worrying about this:
- If you would like to know what admin steps you need to design and implement for proper donation management, my workshop Donation Received – Now What? can help you. You can get that here: https://bit.ly/donationwhatnow
- If you have your donation policy and SOPs for managing donations, and you’d like my professional opinion, I create a personal video review for you: https://bit.ly/reviewdonationsops
- If you would like simple steps to set up and organise your finance & admin foundations guidance by me, you can get a bundle of six simple and short workshops here: https://bit.ly/financeadminbundle
If the bundle is too much for you at this moment, feel free to pick one or more of the workshops individually:
- Set up your financial processes: https://bit.ly/workshopfinancialprocesses
- Understand important basics of bookkeeping for nonprofits: https://bit.ly/workshopbookkeepingbasics
- Be sure you are keeping all the documents you need for project donors, auditors, or officials: https://bit.ly/workshopdocumentationbasics
- Plan your cash flow for a year: https://bit.ly/workshopcashflow
- Get a feel for how time sheets can be helpful to everyone in your nonprofit and set them up straightaway: https://bit.ly/workshoptimesheets
- Learn how to calculate the price of time spent of your team members, including allocations for general costs that are used in different projects: https://bit.ly/workshopfeecalculation
Please note, the bundle is cheaper than buying all six workshops separately. https://bit.ly/financeadminbundle