Honest Actual Costs

I want you to compare two scenarios. In example #1, a new executive director is looking at the budget numbers for fundraising events for the last year. She doesn’t understand what she’s doing wrong. The cost for prizes is 25% more than it was in the years when her predecessor planned the events. What is she missing? Answer>>> When the previous ED ran the events, she bought and paid for the prizes at her own expense, considering it a donation to a good cause.

In example #2, it’s two weeks before the new executive director’s annual performance review. At the last board meeting the new ED reported that there wasn’t enough budget room for supper meetings. The board wonders why the previous executive director was able to make the budget work, so they give the new ED a weak performance evaluation on budgeting abilities. What’s the missing piece? Answer>>> The previous executive director got the meals for free from his family’s restaurant.

Brutal honesty with actual costs.

Those simple little donations and fudging of the numbers for a good cause, sound like a great way to save a few bucks, but the truth is they create a blatantly false financial picture of a non-profit. It is the executive director’s job to be a good steward of the organization. The ED is responsible for ensuring the non-profit is well protected and that includes brutal honesty when it comes to actual costs.

Always transparent.

Here are three simple changes to make to ensure actual expenses are never fudged, and always transparent.

1. Submit receipts in batches. When a donation is small, it can feel ridiculous to submit it for reimbursement. To mitigate those feelings, submit receipts for reimbursement in larger batches, such as every 2-3 months.
2. Donations follow procedure, period. Stop accepting donations outside of the normal donation system. Make the donation procedure clear to all staff and volunteers and do not allow anyone differ from that path.
3. Part ways with volunteers who don’t follow rules. Recognize that some volunteers or staffers have more disposable income or more time to offer. Talk to them about the importance of protecting the non-profit or charitable status of the organization and ask for a commitment to follow policy. Part ways if they refuse.

A clear system for donations.

Non-profits work very hard for all their fundraising dollars. It is very thoughtful when staffers of volunteers want to make donations. Creating a very clear system for donations and transparent expense tracking will help a non-profit fully understand how much funding it honestly needs and help the organization put plans in place to remain sustainable.

When volunteers or staffers embrace policy, their care and stewardship rub off, positively, on others. There will be fewer outliers who ignore protocols because fellow volunteers will demonstrate the better way.

One thing to do.

What is one thing to do, right now, to ensure honest actual costs? Find, or create, a donations procedure, then make sure everyone, from staff to volunteers, follows it.

When a non-profit wants to protect its ability to remain viable over the long-term, embracing honest actual costs will ensure a more accurate budget history for the future. 

Thanks for taking the time to read my ideas. If you know someone who needs to read this, why not grab the link, and share it with them. Let’s work together to empower donors to follow donation policy.

-Christie

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Hi, I'm Christie Saas, former board member, current Executive Director, and non-profit volunteer. I remember well, those early years when I lacked the training, the confidence, and the work-life balance to focus on becoming the best non-profit leader I could be.

Fast-forward past many bumps in the road, lessons learned, and you’ll find me still in the trenches, but a little wiser, a little calmer, and a whole lot happier. I love my work and I want to help you love yours too.

I created ChristieSaas.com so non-profit leaders never need to feel alone. I’m here to help. If you’re a brand-new non-profit leader, or a little more seasoned, someone who’s looking to make a meaningful contribution and still have time for a full life away from the job, you’re in the right place.

© Christie Saas 2022 All Rights Reserved

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