Many organizations are in the process of budgeting for their next fiscal year. Here’s a guest blog from Chrissy Reynolds who wrote a great post on how important it is for both organizations AND donors to budget their donations. That fits nicely with monthly giving, don’t you think?
Donations to the non-profit sector for charitable causes grew by an estimated 3.6% in 2017 and is expected to increase to 3.8% this year. Many charities, foundations and other non-governmental organizations rely on donations to support their plans/mandate and therefore, actively pursue activities to continuously receive the money.
However, donors don’t have bottomless pockets. They need to plan and manage their budgets as well. Whether they’re individuals, companies, private or public institutions, contributors must first make giving a priority before planning and committing funds to it.
Each type of supporter has his or her own way of including giving as a part of its annual budget. For example, governments commit a certain portion of their GDP to give as grants for international initiatives. A UN target is that developed economies should commit 0.7% of their gross national income as part of official development assistance (ODA) to developing economies. ODA can comprise of soft loans, grants or a mixture of both to countries that need them. It may be necessary to raise funds as assistance in a micro-project.
Companies set aside a specific amount that is to be used as donations for activities they support whether it is education, health or social services.
Private individuals who want to give back to their communities by making monetary contributions must also plan for it in their household expenses. For some it can be a one-time gift, driven by an appeal, while others make it a recurring investment.
Regardless of the frequency of donations, there is no doubt that each amount needs to be incorporated in budgets and in annual, monthly, or weekly plans.
Achievement of Targets and Increased Impact
Budgeting is not the only critical activity on the donors’ side. They also want to see how their money is spent and how it impacts the organizations and more importantly, those served by these organizations: the clients, patients, children, animals, etc.
Donors will be more likely to invest in again or better yet in a recurring way if organizations share the impact the donor’s gift has made. Then sharing the organization’s goals and how these can be met both in quantifiable and descriptive terms is an easy next step.
Organizations that can show that the money is spent well and they can show results are more likely to continue getting support. Donors will be pleased that their money is making a difference and an impact. Nonprofits must be able to budget their expenses based upon their goals. And the more recurring donors they have, the easier that becomes.
So, you see, whether money is provided by individuals, companies or institutions, planning and budgeting are essential activities in the fundraising process.
All in all, fundraising and giving involve planning, budgeting, execution, monitoring and evaluation on both sides – the donors and organizations. Only then do you see a great circle of giving and receiving.
Contributed by Chrissy Reynolds.
