An effective accounting system that documents income and expenses in understandable categories is necessary to managing your organization’s money. If you do not have an accountant or bookkeeper, consider recruiting one to help you with this task. This is a great opportunity to identify and work with members of your board or other supporters with special skills such as bookkeeping.
- Create a budget.Organizations can usually base their budgets on their track record of spending and bringing in resources and on their plans for the next year. However, if you’re just starting out, you will have to use your goals as a starting point for estimating expenses.
Your accountant, if you have one, can be of help here. The budget is a guideline. You don't have to get it penny-perfect; just do the best you can. You'll get better at projections over time. When doing your budget, do not neglect to allocate resources to fundraising expenses, like buying envelopes, paper, and postage for solicitation letters or newsletters. It takes money to make money.
The IRS requires that you put together a budget and have a sound accounting program in place for tracking your work. Major donors, particularly foundations and businesses, will want to see your budget before they consider funding you. When your budget is done, you can clearly see what you need to raise in terms of financial resources and begin planning your tactics for garnering that money.
- Taking donations is a responsibility to take seriously.The board and executive director need to have a clear understanding of the funds required to make your organization’s plans a reality. It's a sobering experience to realize that you and your other leaders have the responsibility to raise these funds.
Next Step: Create a Following