Some of my clients are up nights worrying about their budgets.
Are you in the same boat? Are you fretting over questions like: What if the Generous Foundation grant doesn’t come through? What if next week’s event revenue falls short of projections? Should we replace a key staff member, or contract the work out?
We can worry about these things piecemeal, but in an uncertain economy, it makes sense to tackle budget woes head-on, and with some help.
A smart nonprofit leader I know has already done this, by establishing what he calls a “Doomsday Committee.”
A Doomsday Committee is comprised of the Executive Director, the Board Chair, the Treasurer/Finance Committee Chair and, if you have one, the Chief Fiscal Officer. The function of a Doomsday Committee is to take a hard look at income and expenses, and develop different budget scenarios based on possible changes in conditions.
At a minimum, the committee should develop three budgets: an “ideal” budget, where income is on target and expenses remain the same; a “tight” budget, where there is some falloff of income and some expenses need to be trimmed; and a “disaster” budget, where income craters and drastic measures may be called for.
The disaster budget is the most difficult to do, because it’s where the committee needs to make hard decisions. Do we suspend our 403(b) match? Should we increase the employee contribution to the health care plan? Do we lay staff off? Does senior staff take a pay cut? Or, in the worst possible case, should we consider going out of business?
Then, after the Doomsday Committee has done its work, the members should put the plans in a drawer, and get on with the work facing the organization. Your plans are ready, if and when you need may them in the future.
Psychologists would call this exercise “catastrophizing” – thinking specifically about the worst possible thing(s) that could happen. It can be debilitating if that’s all you do. But thinking through disaster scenarios can provide perspective on current reality, and help you let go of fears for the future.
It seems to work. My nonprofit friend says that he sleeps much better, now that the committee has gone through every possible scenario and examined every terrible choice. The hard thinking has already begun, and he’s not the only one doing it. The choices are laid out, and the consequences have been examined.
So, consider forming a Doomsday Committee to tackle the worst-case scenario that’s keeping you up nights. And email me at coachATalexcarterDOTcom and let me know how it goes.
I’m Taking New Clients
I have a couple of openings in my schedule for new coaching clients. If you are a nonprofit leader, or trying to become one, and would like to develop your leadership from a strengths-based perspective, drop me a line at coach[at]alexcarter[dot]com and we’ll talk about how we can work together to make you the leader you’ve always wanted to be.