What is a zero-dollar line item?

Non-profit operating budgets need to be flexible to respond quickly to changes, especially at year-end. Executive directors struggle to create the perfect annual budget that includes everything the organization wants and needs, while magically finding a way to pay for all of it.

Seek budget flexibility.

Developing a budget for a new operating year can be challenging when it isn’t possible to know what self-generated revenue will come in or if some expenses might need to wait until the end of the year to know if there is any left-over budget room to cover the cost. If an executive director is required to have their operating budget approved by the board, it can feel like they are keeping secrets when these budget line items are not included.

Instead of leaving items out of the budget entirely, an executive director can add a few strategically placed $0 line items as a sort of place holder. These additions keep the board informed and give operations the flexibility to make changes throughout the year.

Use every single dollar of funding.

Including a $0 line for self-generated revenue, reduces the risk of predicting more income than might be received for items like fees paid by clients or interest income that might fluctuate heavily.

Including a $0 line item for expenses, reduces the risk of assigning budget dollars to lower priority spending such as swag or uniforms, and not having enough budget room for higher priority expenses like HR or programs.

Simply creating a $0 line item on its own isn’t enough to thoughtfully work this into your next operating budget. An executive director will need two additional administrative pieces to make this work.

The first is simply an understanding of the amounts each of those items have, historically, produced in past years. This information can be kept on a reference tab in the same spreadsheet file with the operating budget and used as needed to reduce the risk of over or under spending.

The second is a governance policy (or executive limitation policy) that allows the executive director to shift budget dollars to these line items without going back to the board for approval. Without this policy, the addition of a $0 line item is somewhat pointless as the ED will need to take all miniscule budget changes to the board for approval. That’s a huge timewaster and is usually reserved for very new, first time, executive directors or an overly controlling board of directors.

WITH a policy that allows the executive director to shift budget dollars within pre-approved budget categories, there is maximum flexibility to use every last dollar of revenue, react quickly to opportunities, and when it looks like there will be a little budget availability, purchase those lower priority expenses. This is a process I use myself, each year, for lower priority items like corporate pens or wish list equipment purchases.

Embrace the ebb and flow of non-profit budgets.

Operating budgets don’t need to be perfect, polished, works of art. Leaving out the miscellaneous little details, the wish-list items, or the maybe-some-day purchases, makes it hard to embrace the true ebbs and flows of the operating year.

A handful of strategically placed $0 line items can help an executive director redirect unspent budget dollars when needed, while at the same time removing any pressure to fulfill random wish list purchases.

Your turn.

Your turn. Does your non-profit use $0 line items in your budget? If so, what are your typical year-end purchases? If not, why? I want to know! Please use the form on the side of the page to let me know, ..or send me an email, ..or message me on socials.

-Christie

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Hi, I'm Christie. I help executive directors develop the systems and processes needed to run a non-profit.

I learned early in my career, there is no non-profit school. Browsing the internet for resources from big-city experts doesn’t provide practical solutions to balance the budget, write a work plan, or conduct an employee evaluation. Leadership development tips don’t really resonate when you are also taking out the recycling and cleaning the washroom.

I created ChristieSaas.com so non-profit leaders never need to wonder how to do the job – no matter how big or small that job is.

I have been the executive director of small-team, small-budget, non-profits for 20+ years. My experience isn’t theory. It is the real, operational, and practical solutions I use every day.

I love my work, and I want to help you love yours too.

© Christie Saas 2025 All Rights Reserved

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