Name: Budgeting into Uncertainty: Navigating Year-End with Clarity and Courage
Uploaded: 2025-10-21T18:30:05.013Z
Duration: 1 h 36 s
Description: Budgeting into Uncertainty: Navigating Year-End with Clarity and Courage

Transcript for "Budgeting into Uncertainty: Navigating Year-End with Clarity and Courage": Hi, everybody. Welcome to today's I'm Sarah. You're part of the marketing team here at Blackbaud. I'm gonna be your host today. Today, we're gonna talk about how to navigate the budgeting process with clarity and courage. Our speaker, Andrew, is gonna provide five top level ways to do this, and then he'll get into a few more practical specific tips that you can use now. I'll also briefly touch on how you can use our fund accounting software throughout the budgeting cycle and to ensure you're staying on track. And then we'll discuss, our next webinar and give you kind of a sneak peek on the topic for that. So I'll do that at the end, so stay with us until then. I'm gonna go through a few housekeeping items, and we'll get started. So we use a platform called Vocast to podcast webinars here at Blackbaud. You should see the engagement panel, so all the interactive tools on the right hand side of your screen. There is a link to download today's slides at the top of the docs tab, which is where you can find helpful resources. So if you wanna grab the PDF for that now, you can do so. We will send a recording out, to your email address after it loads into the system. That normally takes a few hours and then it sends out. We will be running polls today, in general and for CPE credit, which I'll get into in a minute. Those will pop up in that engagement panel section. They're not there right now because they're not live, but that is where you'll see them pop up and they'll take over your screen too. If you run into any issues with that, just let me know in the chat. You can use the chat to interact with us and your fellow attendees. And if you have any questions, you can either drop those into chat or there's a q and a widget as well in your engagement panel. Lastly, if you run into any other issues, just refresh your browser. That normally does the trick or send me a message. Wanted to let everybody know, one of our reps, Nate, is on the line today. He's ready to message with you. He's here for sales specific questions. Talking with him is easy. It normally takes about five minutes, and it's the fastest way to get information on how Blackbaud can help you. He is also available by chat and message as well. And then I will just quickly drop in here a link to our support chat and phone line to see if it's handy. They're always good things to bookmark. And hello to everybody in the chat, Steve, David, Carrie, and Sheryl. Thanks for chiming in there. Alright. Last thing before we get started, for those of you that are hoping to get CPE credit today, we are offering one credit. If you meet the requirements of full fifty minute attendance, and you have to check that in case we get audited. So please make sure you stay on the full time, in responding to all three poll questions. Those will be interspersed throughout and answer them out to you when those are popping up. I'll also leave them up for a few minutes after we move on just to give you time to respond. And I normally send out the certificates for those within two weeks of the webinar. If you've not received it by that two week mark, you can email me at the email address on the screen, and I will, help you troubleshoot what happened with that. Alright. So with that, Andrew, I'm gonna hand it up to you to introduce yourself and the topic, and we'll get going. Alright. Well, thank you, Sarah. Thank you, everybody, for joining me, for this webinar. I I'm very happy that you all were taking time out of your busy day to kinda spend with us and talk about budgeting and kinda ways to tell your story and get around what I assume with most nonprofits are hard conversations. For those of you not joining this for me, I have an updated picture. I am Andrew Horrow. I am the current director of finance at Fifth Avenue Committee. I also am the founder of partner at Finnovate for Good. Really, they're just a consulting firm. We try to help nonprofits get the most out of what they're already paying for, especially if you're an FBNXT user and just help with those processes and systems to kinda make your life easier and get back to your mission and things like budgeting. Been in the nonprofit field and in the county field for about fifteen years. There you can see my three year old daughter and my, I believe, eight week old son now. This is the only way we can get my daughter to smile is with my son. So I'm just gonna stay on this slide for the rest of the presentation if you're on online. But no. Unfortunately, we have to talk about budgeting to get CPE credits. So what are we gonna talk about today? So we're gonna talk about which some of you know, and I don't know how many of you are budgeting for for the first time, second time, fifteenth time. The complexities that go into nonprofit budgeting conversations, they're not as straightforward as my for profit colleagues have where it's profit, profit, profit. It's there's a lot more that goes into it. How to really lead as a financial leader with transparency and empathy in these discussions, and I'll get into more on that when we get there. How to frame these conversations, and it sounds very cliche and I know from the other end of the conversation, it's sometimes recall, but how to turn it into opportunity for your organization. Really, how to deliver that tough news and strategies I've seen works and things I've seen that have not worked. And then really, during these conversations, how to make finance that trusted hub that you can deliver the data with the humanity to really make these conversations easier. I'm not gonna say easy because I don't think there is easy ways to have some of these conversations, but how can we make them easier? So let's talk about nonprofit budgeting. And I think when I think about budgeting, especially early in my career, it was how much money are we spending? How much money are we bringing in? What is the profit? Done. That's budgeting. But I think when we talk about nonprofit budgeting, there's a few more things that go into it. Your mission focus. Usually, everybody around the table is very driven by the mission. And as you get towards the back end, it's like there are other things into play. It's not just the number of people we serve or the area we serve or the number of buildings we build. There's other things that come into play when it comes to budget. And really thinking about what is that emotional complexity. Because every budgeting conversation you're gonna have as a finance person, the person across from you is bringing some sort of baggage. Whether it's the person they just talked to who was benefiting from the program that you're thinking about cutting on a finance side or the person who stay up late at night helping participants or helping to open the community center because you're telling them they couldn't they couldn't hire somebody else. That I think a lot of people in nonprofits put a lot more of their mental capacity into their job because they're there for a reason. Unfortunately, none of us work at nonprofits for the money. I wish we did, but that's not why we're here. We wanna help people. And I think you need to remember that we all need to remember that when we're having these budgeting discussions because there's more that comes into it. And really, what is the role of that finance leader and CFOs, controllers, everybody on the financing involved in budgeting. It's really protecting the mission from there's many things you're protecting from. One, to make sure you're that you're there tomorrow, building that financial stability. But I think also one of the roles of those of a finance person during these conversations is really to be level headed about some of these discussions that I think we've all been in meetings at some point where they get where people get really excited about a project. They're rolling along. They're rolling along, but no one thinks, okay. What is the reporting aspect? How much is this gonna cost? What's the risk that the cost are gonna overrun that sometimes you get so you get so lost in the mission? And it really is a a balancing act of that empathy, which we'll get into later, and that really data driven process. And I know early in my career, when I first went into nonprofit, I go, oh, I'm gonna be in a motionless hut and just be numbers driven, and that's gonna be an asset to my organization. And I'll talk about a few examples of why that did not work in my early in my career. And it's really about being able to balance that act. And, unfortunately, as finance leaders, because we are the stewards of money at the end of the day, we have to be the one to do this. So I think there are unique pressures that come on financing that you really wouldn't understand. What are those financial pressure points? What is the what is cash flow? What is budgeting? Do we have debt that we need to get into, with covenant? Like, what do we have to answer to from our finance team? But at the same side, what does the organization need? And really helping to define during a budgeting process what is the responsibility. Is the responsibility of the team I worked with the organization where finance is really just a collector of data and then it goes off to the executive director to do all the budgeting, do all the hard conversations that come back for his for his finance or accounting leading that charge of these conversations. Because even if you're not leading those conversations, having good actuals from the prior year, having projections that align with the strategic plan, making sure that what the development team might be giving you in terms of revenue for next year is realistic. Because the last thing you wanna do is sign off on a budget that maybe it balances, but you know full well in six months you're gonna be looking at it and you're just not gonna be anywhere near you. You're darn you're gonna be on the info side. And I think part of this too, and we'll get into it later, is the importance of those tough conversations. How can we really get some of the conversations we wanna have? How can you have them early? Because I think it's important to remember I'm gonna hit on this a few times. Just because you say no to somebody during a budget conversation, it could be no, but it's also, you know what? Not right now at this moment. But if you can go out there and find the funding, we can definitely add this to the budget. So it's really having these conversations upfront, being transparent, I think is key. And that will bring us to the first poll question, which Sarah is gonna launch. So it's gonna be where the chat is. You're gonna see a little red dot where the polls are. And we'll leave it open for a few minutes. But what aspect of budgeting feels the most challenging for your organization right now? Is it is it balancing the mission and the financial constraints that people just don't wanna cut things? I want to ask my executive director. In a pinch, which program would you cut? And her response was I can't kill any of my children. But it was at some point, you might need to have that. You need to gain this decision. Tracking and adjusting budgets throughout the year, I know Sarah mentioned it. That's where I think something like f e n x t where you have that budget repository. You can track actuals in real time. You can really help the organization. But I know most of the phones call will have that giant budgeting spreadsheet and how we're tracking that throughout the year. So going back to the conversation, so it's really leading with transparency and empathy. And I saw a question in the chat. What is what does empathy mean? And we'll get into that here. But it's really like when I thought about what's changed from when I first started my career when I think about budgeting, it's this. It's adding the not just the data piece, having great actual having a projection, knowing where the numbers are coming from, but there is that human cost that to make a budgeting process, I'd say, constructive, you really need to have. And I don't think I didn't have this ten years ago. I don't know if many financing did it. I I always talk about the differences between a CFO about ten years ago and a CFO today. This is one of those things I think that needs to come along with it. So transparency, I I to me is a little self explanatory, but I'll explain it. It's knowing where things are coming from, what's going into the budget, making sure people know why things are happening. No one's ever you're never gonna get a 100% of the people who understand, what's going on and why, and they're not gonna like it. You're never gonna get everybody on board. But giving people a why really allows them the chance to understand. And I always say I said this to my director. I said this to many people I've worked with. I'm not always gonna agree with you behind closed doors. But if I work for you, let me say my piece. And then when we're out together, we're gonna be locked up. But I just need to understand why. Like, if you tell me no on something, just tell me why. And you know what? Sometimes it's gonna come down from the executive director or board because we said so. It's always gonna happen, but just try to give people that why. Now empathy and communication. And I think it's when I think about hard conversations, what where I'm defining empathy today is this understanding and recognition of people's emotions. I think whenever you have these budget conversations, know that, like I said earlier, the person across the table has baggage. They have a reason that they're fighting. It's it's usually mission aligned. It's gonna be about driving the program. They're not sitting there asking for a fancy new budgeting tool or accounting tool. It's really, I wanna add this so I can help people, or I wanna add this person so that this person doesn't have to work ninety hours a week. So it's thinking about where they're coming from and delivering that bad news in such a way. They're probably not gonna agree with you, but at least to get on the same page and understand why. And to kinda hit all the same points, but I really think it's I've worked with organizations where finance is seen as kind of the grim reverb on budgeting talks. That you have this planning session with management where here's our priorities for the year, and then everybody goes back and does their budgets and everything ticks and tie and everything looks great, and then finance gets the red pen out and starts slashing. And I really think that doesn't have to be the case. Yes. Finance is usually the one that has to start making cuts because we are the stewards of the money. You know, we are the ones who have to make sure that the lights stay on and that when the payroll company goes to pull the funds for every paycheck that there's cash in the bank. So it's really key to be transparent, have empathy, and just be able to help people understand what's going on in the organization and why the decisions that are being made happen. And it's it's always a fine line between giving people the information they need to understand and too much information. I know some nonprofit that finance keeps everything under a lock and key. You can't know anything. And then I work with other organizations with the budget spreadsheet that everybody has access to also has everybody's salary data. And then if you look closely enough, you could see plan layoffs that is about finding that middle ground of, okay, what data do we wanna put out there and how do we wanna craft the message so that people understand. And I think it's really about when having these conversations, it's about knowing where you're gonna get you're gonna get pushed back. If you try to cut something from somebody's budget, they're always gonna push back. Even in my past life where I was not a budget decision maker but a budget owner or creator, every time I would have to make a budget, I would do a sit up. It's it's the principle of I'm gonna ask for 10,000. When they cut it to 5,000, that's what I wanted. But not everybody thinks that way, but also I still would have been mad that you cut my 10,000. I really wanted to go to that conference on the beach in Maui. But you know what? I'll go to the one in Columbus, Ohio. Sorry to anybody in Columbus. That was bad comparison to Maui, but anybody would rather be in Maui. And how do you take these knowing people are gonna have those reactions, how can you make these these conversations collaborative? And just taking a step back and going, okay. We need to cut something. Here is why. So what can we cut to still fulfill to set out to do what you wanna do? And some of the and we've talked about conversations during this climate of funding and what nonprofits are facing is, okay, what is the core of what we're trying to accomplish and get people? And how can we get there? And how can we make sure we might not all agree, but we all understand why things are happening. That, you know what? Could we spend down our cash reserves this year to keep a program afloat? Yeah. But what if funding doesn't come in next year and we don't even have fund we don't even have the cash reserves to pay to keep the lights on, or to make sure everything gets funded. Where what are we gonna subsidize to maintain our mission? Making sure that everybody's kind of not in agreement, but in understanding why what's happening is happening. I think it's key. Also, to make that I think going into these conversations is to remember and I have a three year old. I understand this. Compromise is not always obtainable. You're almost never gonna walk away from these discussions where everybody's happy or everybody's in a good mood or everybody's on the same page. But I think what is obtainable is understanding, of understanding what is happening and why. And knowing that the organization is bigger than any one department and the goal is to fulfill that mission and what's the best way. Is it to reach as many people as possible? Or you know what? Rather than reach as many people possible, let's get back to our core programs and reach the people that we're really good at reaching. And maybe find an organization that, you know what, we can't do this program as well, but they can. So we can cut budget here, send people to a sister or brother organization or cousin, and and help people that way. That doesn't have to be out. Let's get creative. Let's let's problem solve that if we're gonna make cuts, how can we make them not affect what we try to do day to day? Well, thinking about these difficult conversations, it really gets back to what are some strategies I've seen in my career, I've done in my career that really helped. Like I said, when I first left public accounting to go work in a nonprofit, I was very much like, numbers don't lie. You can make any story you can spend any story you want. Preview for the next webinar where we talk about presenting financial information, But you can spend any story you want. You can tell any picture. You can make a PowerPoint that says just about anything. You can skew some graph. But you know it doesn't lie in income statement, a trial balance, a balance sheet. The numbers don't lie. As I said before, and I'll keep reiterating it, that's not the way nonstopics work. That's not the way people see things. Most people don't care about the numbers. They wanna know about the metrics and how the mission's gonna happen. And, like, if you make a cut to this program, what's gonna happen to these participants or what's gonna happen to these staff or what's gonna happen to the program. So thinking about if you're gonna have to tell these stories and have these conversations, work with your program team. What can you add to the numbers to tell the story you wanna tell? What are you your budget preparing to do? I always say, I learned very early in my nonprofit career. Boards don't like numbers. Most boards don't like numbers. They like pictures. So what kind of graphs can you choose? Speaking of the last webinar, we talked about automation. Plug your budget into either Copilot or ChatGPT and ask for some graph that explain the budget, some cycles. Just know, like, how it's gonna be received and tell the story you wanna tell. Yes. We're cutting a program. Here's why. Here's what's gonna happen, and here's why this is the most necessary thing even though it's gonna hurt members of our community. I think part of this too is and it's hard to start some as as you're taking notes and thinking about this, you've never done this before. This this one doesn't really hit you, but highlight your past success. Think about how long your organization's been there and how it's weathered the storm through multiple things and how this is just a speed bump to make sure your core stays intact. So when opportunity presents itself, you can jump and you can build out the core programs you have. And I think another thing that's key is, as finance people, know what communicate what's going on. Where are where do you see cost rising? I I joke I'm I'm in affordable housing. So, like, the two things I really can't control, real estate taxes and utilities. I don't control either of those. Do you know what's rising when I am? Real estate taxes and utilities is a fact of life. So when I think of budgeting and cutting budgets, my biggest rising cost, I can't really touch, but I need to know that when I go into budgeting that, you know what? Some things are outside of my control, so let's make sure we're controlling what we can. Another place I've seen is effective is sometimes our organization gets so big. And you know what? This program is self sufficient. This one funds itself, and this one supplements this one, a, b, and c. But when you're sitting as a program person in those programs, you you don't understand that. You don't understand how the money moves or my if my program is working in a surplus, why can't I hire three more people? Whereas the work sometimes is taking a step back as an organization and really explaining the life cycle of funding throughout the organization and how the money moves across. I've seen some exec directors make it spreadsheet where they show the surplus with the indirect cost that comes from admin and then the deficit surplus that just shows out across the board. You know what? This this program a has a surplus of a $100,000. Program program b has a deficit of $50,000, but we serve double the people with program b. So what that means to me is program a needs to have that surplus so we can keep funding program b because that's what we wanna do. And thinking about what is that life cycle of a dollar. When I was in microfinance, we would always show new staff how a dollar a dollar come in came in came into the program. We loan it out and have that money interest and principal come back and we'll just cycle through the program. And it kinda gave our staff an idea of how it worked. And also realizing, and I see a lot of this in the chat is, also as science people, we need to know that a budget is not a cash flow projection. If we are an organization that's really summer event heavy, that's where we do our best fundraising, that's where we get our funds, we need to realize when we budget, we can't buy that new copier in January. We can't buy that new furniture in January. That sometimes these budgets need to be on a time basis, either by quarter or by month so that we're not spending where we don't have the cash. The last thing you wanna do is know, hey. Come August, we're gonna have enough money in the bank to pay all our bills, but all those bills come in February. And you're gonna drive your AP people nuts if they're getting collection calls in June knowing full well we're not gonna pay to August anyway. So thinking about what are the constraints? How does our how does our price cycle operate? And you're about to go into these conversations. Most of the people, if you're in a budgeting conversation, you've had tough conversations with these people before. You know how they operate, what they're thinking. How can you anticipate what their questions are? And really drive the conversation to try to alleviate those questions before they come up. I would also say preparing answers to some of these questions, thinking about what they're gonna ask, how are you gonna respond. Keep keep it concise and fact based. Because remember, if you're talking about cutting somebody's program or funding your staff, they immediately are going to an emotional fight or flight response, and most people are gonna fight for their staff and their programs because there are a lot of reasons what they've invested in. So thinking about how to anticipate those concerns and really making sure from a finance point of view, you are simplifying your jargon. And this is somewhere where I think AI can help. It's thinking about, okay. I'm gonna cut this program. Here's how I'm gonna respond and make sure that it's in, for lack of better terms, common terms. That's something easy to to relate to and making sure that your staff understand kinda where you're coming from as a clear fact based discussion because you don't wanna be emotional on both sides of the table. And I would also say and it it requires some emotional intelligence, but sometimes you just say, you know what? Let's take a five minute break. Let's all go get some coffee. Let's also get some water and come back to the table because sometimes people need to clear their head. I know early in my career, I was the type of person with any type of criticism or rejection. I always chose fight. Even though I I always internalize it and usually a day later, I would come around and understand. But in the room, I always chose fight. And I now recognize that, but sometimes it was just like, you know what? Let me take ten minutes away, come back with a level head because you're attacking what I do for it, and I care about it. Can't find my mouse. And I would say also, make sure that this is a I wouldn't even say necessarily a two way street because at a certain point, budget budget decisions need to be made, and there has to be somebody to own it. But make sure there is feedback, and you're leveraging if somebody who is on the front line of your organization helping people is really fighting, find out why. What will this cut do on the outside? If we cut our front desk hours and we're not as available to participants on a walking basis, if your front line people are gonna say, you know what? That's gonna hurt our reputation and that word will get around and it's gonna hurt everything. Think about that. How how are those insights gonna go? And especially, sometimes you just need to let people speak. Because once they once the emotion comes into it, some people need to get out. I always tell people I work for, behind closed doors, I'm gonna fight for what I believe in. Once we leave this office, if I work for you, your decision is what we're gonna go with, With some exceptions. But I'll usually fall in line but I just need to say my piece sometimes. Get it off my chest, make sure I've been heard. But then if you're you're the one you're the decision maker, you make the decision. Sometimes people just need to be heard and let them speak even if you're coming out from a completely different place. Sometimes that will open up a avenue of understanding. And really try to shift that narrative and how can you work together. If we're we have to cut budgets. What problems is that gonna create for you? How can we solve them? How can we leverage some of the tools we already have or some automation? You know what? We're gonna cut some jobs in the program. But you know what? We're gonna bring in an automation tool that's gonna take care of the data entry. The first US data entry is now available for you to do something else that we're cutting. So think about how you can ship that narrative narrative and really problem solve and get to where you need to go. So that brings us to our second poll question for those of you who wanna purchase states and also get TPE. So when you're preparing for these budget conversations, what do you find most helpful? And I think for me, it really depends on who I'm going to talk to. There to know who you're about to walk in the room with, what is their basis? Where are they coming at it from? What do they care about? Because everybody's gonna take away something different that I don't think this is really a one size fits all. So just thinking about kinda what you're seeing and who you're about to sit down with. And just looking at the chat, so I think, encountering challenges in how it's getting indirect expenses. I always find that hard too because some of it varies by grants, some of it varies by department. Where I see some of the best budgeting and some of these conversations, it's really determining an organization wide indirect on a program or department basis using that for your organizational budget for some of these conversations. And then, obviously, as you get deeper and more complex, then you have to figure out what program, what agencies required. But at least having the same making sure when you're having these conversations that everybody's selling somewhat of a level playing field and there's an understanding of why what's happening is, I think it really helps. So what are some storytelling techniques I found? I think some of this is if you're gonna present a deficit or a cut, making sure that your presentation isn't all numbers break based. Making sure that they the the value the organization has is still there and why you're doing it. I also this is a trick I learned early on. Don't use the color red when you're cutting something. Some people have very, I think it's a it's a older thing and I have this. A lot of my teachers use red pen on tests or papers when they were grading by hand. And I think some board members still have that immersion or some people you work with. So try not to use red. But link these to real world outcomes. Talk about how many people you're still gonna be able to serve, how many people you're gonna be able to come back to, and make sure that the value the organization is providing is still there. Explain the why. You know what? We're cutting this program that's gonna devastate, but we found this organization down the street that still does this. So we're still gonna be able to refer people, and you know what? They're gonna refer people back to us because of the programs we're able to keep, and they don't do. So really demonstrating how these cuts and even if they are gonna even if you're just cutting a program you're not gonna have, explain why and demonstrate how, you know what, we're cutting this program, but what it's gonna establish is we're gonna have a more solid foundation that our three year projection is a lot stronger. That I think a lot of decisions organizations made today are like, do we save something for a year and hope the funding landscape kinda comes back, or do we cut something this year knowing we're prepared if everything is status quo as it is today. And if things get better, we'll be in a better place to take advantage and help more people. So really thinking about that decision, and I think as financial people, some of our some of our stewardship is that long term thinking that I don't think a program team necessarily has because they are thinking about the participant or the member or the community that's right in front of them. Our job, like I said, is to keep the lights on and to make sure people get their paycheck. Those are the two things people really care about, which I understand. And it's really about how do you paint that story? How do you paint the story about what's gonna happen to the organization next year? What is that budget gonna mean? And it's really using narrative, pictures, graphs, concrete examples of how we are making this decision and it's gonna leverage this. Or you know what? This isn't part of the budget, but if we get this funding, here's what we're gonna be able to do because sometimes that will help a board to really push forward with a fundraising effort. And really giving those concrete examples of what's going on and why, I think, is key. I think it's like a war. And I think this this can this next part, it's about how to take some of these conversations and turn them into opportunities. I've been on the other end of these conversations not not from a CFO point but from a staff point, and I think it can ring hollow if it's not done correctly. Hey. We're cutting your staff, but this is just an opportunity to learn. I think we all have not promised have heard that in our career, and we've all rolled our eyes at that. But in some cases, we talk about using systems, using AI, using automation. How can we do that? How can we acknowledge the disappointment and work together? Because I think what I've seen where I've seen finance become the the, big bad Grim Reaper is, hey. We're gonna cut something and we're walking away. Here's your budget. Go figure it out. Like, that's where I've seen this fail is a lot of organizations. You have a collaborative effort up until a point. We've all been there. It's finance committee or board meeting on Monday. You're sitting there on a Friday night or Saturday night with your CEO or executive director making the final edits to the budget. And then after the board approves them, they're just sent out to the program teams. Whatever the final budget was that approved, No notes, no explanation, and I think that leads to a well, they cut this at the last minute, but why I needed this. And I've seen places where the program team goes, oh, well, I'm not gonna follow this budget anyway. So really thinking about how can you make sure that communication is there, acknowledge that disappointment, but now work together. Okay. Why are you so upset that we're making this cut? What is it gonna do to the program? Always try to steer the the conversation back to you, and I know it's hard, but back to the mission. We are here to go over our mission. And sometimes these cuts we have to make are to further that mission for the future. So let's think about how this is gonna affect the organization. Where do we now have a gap? What are we missing? Why is this being done? And why are you so strongly against it? To think of ways that you can help people work through what they see now as a whole in their department or program. Focus on the big picture and I really think it comes back to that word empathy. Like, make sure this is hard for people. Especially, as you work in nonprofits, you're gonna end up dealing with some budget owners that have never had to deal with budget. They've been promoted, but they haven't been given the skills to have these conversations. And they're coming at it from a field line worker who sees any cut as an affront to what they do. And knowing that some of these conversations should be hard, but you need to steer them back and some of this is teaching. You're gonna be teaching as a financial leader, sometimes you're gonna teach somebody how to budget, how to use a budget, how to track actuals. So I think it's thinking about that as you're sitting down to have these conversations. Alright. And I think and I I've seen the the chat too. And it's important to train everybody in some level of financial literacy. Yes. So I think there's a layer of the presentation or it it was in the the blog post I did. But I think some of this is sitting down and before the budgeting process starts, let's sit down and what is the organization doing next year? What are our goals? But also, hey. Let's sit down. Here's the budget template you're gonna get. Here's the budget to actuals you're gonna get for the last three quarters. Here is how all the numbers intersect. Here's what you're looking at, and here's what you need to do moving forward. Because I think when people don't have financial literacy, what they're gonna do, they're just gonna copy last year's budget. Maybe they're smart. They'll give themselves a three to 5% bump. But in the wake of not understanding, they're just gonna give themselves an increase and figure it out later. And they're the ones that are gonna submit an invoice six months from now that wasn't budgeted, but they've already spent the money so you can't really say no. So it's some of this is on us as finance leaders to teach that how to budget, how to keep it. Give them teach some of them need to be taught Excel to keep a spreadsheet. And, unfortunately, that sometimes falls to us as finance leaders to to do. But I think when having these conversations, remember to stay mission focused. I always remember like I said, when I first started, I was definitely a numbers life with soul when having these conversations. It's all about the numbers. It was all about the bottom line. It was all about cash in hand. And some of those conversations were not pretty. I I'm not proud of them, but I've learned from them. I've I've talked about in past webinars. There was a moment in, like, six months into, talking about six months into my nonprofit, and I realized that no one spoke accounting. No one. So what did I do? I ended up having I had the budget for it. I bought lunch for four straight weeks with development team on Wednesdays. It's really me and development had some disagreements. I invited everybody in. We walked through a balance sheet. We walked through an income statement. We walked through budgeting. And the last one, we literally sat down and said, I took their they had a manual for how they use their their, razor deck and what they called a commitment and what they called a gift to grant, a contribution. And I put all those terms on a whiteboard, and I explained what they meant to me from an accounting standpoint. And they explained to me what it meant from a development standpoint. We didn't end up agreeing, but at least we knew when we were on the same terms. So come budgeting time or come reporting time, we were all working with a similar set of numbers and we knew where our disagreements were and where our differences were. And had we not had I not trained them on financial literacy to read what I was giving them, they did they just ignored it. At least in this way, they knew what I was presenting and we could find some middle ground. And when we said this, recognize the human impact of budgeting decisions. There's human consequences in your budget. Especially, I mean, I mean, the most blatant one is you're talking about personnel. You're talking about cutting people's jobs, people's livelihood. These conversations are not easy. I've been I've been on all sides of these conversations, in my career, and they're never easy. But thinking about, like, our goal as financial professionals at a nonprofit is to make sure that we are fulfilling the mission. And sometimes that comes with cuts, especially in today's kind of environment where we don't know where our next funding source is gonna come from. Nothing is guaranteed. So making sure that you have that kind of core capacity to keep the lights on. But remember, that comes at a cost to somebody and something. And to have those conversations lately and it's really there's times you're gonna have these conversations and it's it's I always say, and not a problem, any problem, there's people processing systems. Rarely is people the problem because I've never met a nonprofit finance staff that's overstaffed. But some programs, sometimes people are the problem. But having the conversation to explain why and how and making sure you're prepared, thinking about how is this gonna affect the organization as a whole, who do they deal with, making sure that you're still keeping that trust, I think, is key. And I think it's when we think about budgeting, what are the next steps? What making sure your teams and your budget owners understand the process that, hey. You're gonna fill out your budget template that we give you. We're gonna come back. We're gonna compile it. And the the truth of the matter is we're gonna see how big of a deficit we are at the first half. I've never seen a budget counted at the deficit at the first half because people ask for everything. We're gonna come back to you. We're gonna set we're we're already set priorities. We're gonna figure out kinda where we need to cut, how we wanna cut it. We're gonna work with you as a budget owner to make sure that you understand these cuts. We're gonna go back. You know what? We might need to make some last minute tweaks to to get it to where it needs to be, but then we're gonna give it back to you. We're gonna explain what we did. And after the budget finalize the board, we're gonna make sure you understand what your budget is and how it's going. And I think that the last thing is so key, especially in today's landscape is no can also mean not right now. That you know what? You wanted to do an expansion of this program. We looked at the funding. It's not gonna happen in the first quarter of our fiscal year. But you know what? If we get six months from now and the funding landscape has changed and we have more, funding than we thought, you know what? When we reforecast, we can add that back in. We're gonna keep this budget off to the side and it is a contingent budget. I found this to be very effective because you're essentially not by saying no to people. You're essentially saying to your program team, your development team, we just don't have the funding. If we find the funding, I will activate this budget immediately. But it has to be we can't just do it and hope for the funding, especially in today's landscape. So it's kind of having those and I know somebody had asked about scenarios. It's having those scenarios not just on your revenue side, but also your expense side. What happens with that? I always say, if you're gonna talk about scenario budgeting, it's you have to have your core, The things you're not cutting that I I I was talking about a a prior webinar. I talked about a lot is, okay, funding gets cut today for for one of your programs. Which is it? Where are you where is your lifeline? And when I think of that scenario, buddy, scenario budgeting is really getting back to those basics. And where do we wanna start from? What is that piece that makes the organization who we are, all with our admin cost? Okay. Now we have our core. What scenario budgeting is? It's adding to that core. Okay. We're gonna add this program back if we get this funding. Now we're gonna add this program at a limited capacity with this funding. It's thinking about how you can add on to get to your full budget or maybe even, like, a 120 percent of your full budget. But you know what? It's all funding based. And we're really gonna track this by month. You know what? We're we're not getting the funding we need. We're back to scenario a. And sometimes, boards just wanna see scenarios so they can choose one. But I think the key is, as the financial steward, is to make sure that they're realistic. That if you are presenting a best case scenario to your board, I think it's key to say, this probably isn't gonna happen, especially in today's day and age just with everybody, the funding the way it is. That I think it's more doomsday scenarios or what boards are looking for than the high in the sky that I might have seen two, three years ago. But it's really about working with your team, providing that clear next step and actionable solution that, like, not right now, but if this, this, and this happens, we can have that conversation. That I would say we don't shut the door. We just make sure that you understand where the cable is. So I think part of this comes back to, especially as finance people, is making sure that the numbers are sound. All of this that we've talked about for the last forty four minutes and fifty seven seconds is a moot point if you've done all this work and it turns out the numbers that you supplied either at budgeting or actuals were wrong. The last thing you wanna do is present either a too rosy picture or a too gloomy picture and have to cut things or add things and then do the opposite about two months later. So thinking about how to make sure that your numbers are in a good place because that's what starts with us as the accounting professional. The numbers start here. We need to make sure we know what's happening, what's going on, what is our cash flow look like to have these conversations because tough conversations, you only wanna have them once. Because the minute you have to have them again, people start to not trust you, and they're not gonna listen to what you have to say. And it really comes back to the trust, and that's where transparency comes in. So you're not hiding anything. You're being very transparent about what you're doing. You're making sure people understand, but at the same time, you're also making sure that it's right and that everybody's doing what they need to and everybody's coming along. And I think it to to kinda sum it up, it's once finance and accounting, fiscal, whatever you wanna call it, business office, once you're a trusted ally, it does make these conversations easier. If you can make sure that your numbers are correct, you have more more clout within the organization. So we need to have these tough discussions. People aren't questioning where your numbers are coming from. I'll never forget, I sat down in a, budgeting conversation, one of the first ones I ever sat down in, and we're talking about changing a methodology for allocating expenses. And that the organization we made a typo on the slide. And I prepared the slide. And when I say we, a typo was made that had nothing to do with the way we are work allocating expenses to our program. But I can tell you rather than telling you about this new allocation method, which is actually better for programs, we spent an hour talking about this typo in a number and how it misrepresented the facts. That it's those types of things, once you allow for that doubt, it's really going to prevent a lot, and it's gonna make these conversations even harder. And maintain an open dialogue. Make sure your door is open. Like, I know when I work, for the most part, my door is open. It's closed right now because I'm on the webinar, but I actually keep candy in my office. That's how people come to see me as a CFO. But making sure that people can come in and ask questions. If they don't understand something, make sure they're coming to you and asking rather than harboring that resentment. Make it a as much of a two way street as it can possibly be depending on your organization. And I think it's being confident, giving your board, your executive team, your management circle, your budget owners, giving them confidence in what you're presenting to them makes it in some cases easier. If they don't have confidence in you, then that's gonna come out when they're having to fight the discussions with their team. It's very simple. If they don't trust your numbers, they're not gonna trust anything and you can you can always tell when somebody doesn't trust what you're presenting. And really try to make these decisions based off data while layering in the empathy and the decisions. So I'm gonna jump ahead to the third poll question if you wanna launch that, Sarah. I hope. There we go. So thinking about what are your next steps for today? Speaking with somebody else that's been through it. I know some of the problems are, do you have a good tool or template? Who runs your budget conversation is sometimes sometimes good. I know a lot of if you haven't had strong financial management in the past, sometimes that runs through an executive director or CEO, which can sometimes be a problem because that's where all the information ends up anyway. So sometimes it's hard to make sure that information gets into the hands of who needs it. But there's so many different ways to start, and especially if you are a calendar year organization, your budgeting should be starting now. If you are a June 30, you're thinking about either actuals for the quarter or you're thinking about reforecasting. Maybe you're waiting to see what happens with the federal budget to reforecast. I don't know. But budgeting is a year round conversation that if you wait till about two months before your fiscal year end, you're probably already behind the time. So let's figure out a better way to do things and make sure it's it's all together. So I think, when I think about concluding this up, my big thing I always took away from what I did wrong in budgeting, I always come back to this empathy and transparency. Now when I first started, and I can't hit this enough, is my numbers are right. Don't question my numbers. They're also the numbers, so they're right. That might seem like a circle, but I just didn't take into account this human side of budgeting and the human cost that came into it, especially the staff. Now that I'm CFO and you have to be in every meeting and every discussion, you understand that. But I think sometimes I get lost in my own numbers even still and remembering that there is a human side to this. And having those strategic conversations, being transparent, making sure people understand the why I think is key. I don't know. I Sarah, I'm gonna jump to this slide. I don't know if your Internet's back up and running, if you want me to share. Yeah. I've got it. Thank you. So, yeah, just, you know, as Andrew mentioned, like, when those hard conversations come up, whether it's cuts or changes or the new priorities, it is important to have a system that lets you quickly model those scenarios, track the changes that were made, and be able to share those updates with your team. That can make all the difference. Just being able to make the process transparent and less stressful for everybody involved. So if you want to chat about your budgeting process or brainstorm solutions or just talk about how others are tackling similar challenges, you can let us know in the poll that I'll open, or you can reach out to me or Andrew after the session, whatever you would like to do. And that's just a no pressure chat, just a conversation. We've got a whole team of nonprofit finance experts who have worked at nonprofits and understand all of the budgeting challenges that Andrew has mentioned during this session. And I think a key here is when you have this information in your system, you're able to report on it. I it also makes it easier for your, accounts payable people to make sure things are within budget. Because if you have the budget loaded in here there and you only have budget for $5,000, you're about to spend 10, the system's gonna tell you. So sometimes having it there really makes this easier for not only you but also your team to do everything. So Mhmm. I think it's it's so key and it also allows you to have the dashboard, the automatic reporting, all the fun stuff that you gotta get to budget. Amen. Alright. Like Sarah said, if you have any questions, I'm more than happy to talk to anybody. I I deal with this stuff day after day, both in the consulting and the self side. If you don't need my help and have the means, I wanna thank my executive director for allowing me to take an hour today. There's a QR code to support my organization. Or if you just wanna see a picture of me, here's the slide. Anything to wrap up there before we get the questions? Yes. Just really quickly, I wanna go through what's in the docs tab. Go ahead and submit your questions via chat and q and a, and, we'll have at least six minutes to cover those. So if you want a copy of the deck, that is at the top of the docs tab. It's a PDF of today's slides. There's a link to sign up for Andrew's next webinar, which I believe will be on the November 19, and that's translating your financial story, especially for the non finance folks, or your board, your external stakeholders. So keeping in line with what we were talking about today, just how to communicate, important information to them in a way that will be engaging. And for those of you that are in or near New York City, Andrew and I are going to be there for the non, nonprofit finance forum, which we're hosting in Midtown on Wednesday, November 12. So there is a link in the docs tab to sign up for that. If you are local to New York City, we would love to see you. We are limiting registration, though. So if you think you can make it, go ahead and sign up. We've got a couple helpful guides and blog posts on creating a budgeting process and a guide to financial projections. And there's a link to Andrew's website, and Nate's calendar. And then if anybody missed SpeedyCon, you can actually go register to watch many of the sessions, for free on demand for the next month or so. So there's a link to do that. Alright. Let's get to questions. Yeah. I'm I'm a lot of stuff. Come come visit us in New York. It'll be fun. Yeah. So I see somebody asking about kind of a three to five year forecast and any tips on drafting them. I really think the best tip I can give is really take your the first thing to do is take your budget and just recreate it growing by three to 5% on your expense base and just start somewhere. I think one of the hardest things about making a three to five year, projection is really where to start. And sometimes it's a matter of let me just map out my budget for the next five years. And now let's once you have that mapped out, now let's see. Okay. What are my drivers of revenue? What is it development related? Or where do I know have conversations with your development team. What's guaranteed? What do we know think we can raise? What's the long shot? Where do we wanna grow as an organization? I think it's it's a matter of having somewhere to start to start that conversation. Because when you're looking at a blank spreadsheet, it feels so overwhelming. So that that's my advice. It's really just take your budget, map it out for five years with a small percentage increase, and then now start going line by line and see how you wanna model that. Next question I see, are there any budget templates you can share and use to import into NXT? That is unfortunately, there's not one spot size fits all. I'm more than happy to talk to you and see how your NXT is set up to give you all those budgeting templates that the goal would be you have your budgeting template then you have your tab that literally becomes the import. Makes it easy. But I think it it I have to see how the account segments are, how you're using project codes, how you're getting attributes to really give you a template that's gonna do everything you can. Both from an input and an import because those are two separate things. Now you're tracking your budget. Okay. Now let's put it in the import format. Now once it's in that import format, it's very easy, because no one should be hand keying in on an entire budget. So make sure you're importing. Last question here or maybe there's 10 hold two more. How do you balance giving your program team too much information so they start to ignore it? It's it's a fine line. I always find that and some of this I've used AI for, is like, what would I need to know to if I wasn't the person in these numbers or what would what how do I put this in normal terms? I've often found sometimes having the information available to them in a meeting rather than giving it to them also helps sometimes. Because sometimes we can go on information overload. But if you're sitting in that meeting and they ask a question and you have printed copies of spreadsheets or can pull it up on a screen that's easy to read, sometimes that makes it a little easier to have these conversations, than if you're just giving them all the information. Because you can also tell them how to book Canada and what it means. Sometimes when you overload people with a giant budgeting spreadsheet with so much information that you think that they think they need, it's just too much and then they end up not looking at anything. So how can you make it a little easier on you to to review it? But I I'd say having information available to the meeting, but also talking to them what do you wanna say. How do you need information? Like, I know in in organization I work with, they always send their their general ledger as part of the budget process, but they send me a PDF. I don't know about anybody else on this webinar. I do not think a PDF general ledger is good for just about anything. So I had them start sending it in Excel, and it's just more useful people. So just figuring out what they need and kind of it ends up becoming on finance to kind of, to do extra work, but it also makes sure that the information getting out there is what people really need. So hopefully that answers the question in some way, shape, or form. Let me see here. You're going back to that kind of scenario budgeting, what assumptions to use. Usually, it kinda, for me, depends on how the organization structure. Are you department based? Are you program based? Are you truly grant based? I've worked some organization for every program that aligned to a direct funding source and that was the scenario modeling. So it kinda depends how you break down your budget and how you work to really figure out what scenarios you have. More than happy to talk to you, look at your budget, give you some ideas, but without seeing how your organization functions, it's kinda a scenario. Or are we gonna just, like I said, get back to that core, and now let's start adding on from there and see where the good scenarios are. Or to think about, okay, we have three major funders. What if one of them goes away? That's the scenario. It's kinda figuring out and this is the question, but it's hard without being in it to push and pull and what where to pull those levers. And just the last question, as I see time ticking down on me, I believe, Sarah, Greg Maron, this is webinar is available after this will be posted after the session. It might take a week to run out of Yes. Yeah. Amy, you should get it in your email, and you should be able to forward it. If you run into any issues, email me, and I'll help you get a copy to share. And also just throwing it out there now that we're overrunning by two seconds, I have made this type of presentation to board members too to kinda educate them. So I'm more than happy to talk. So thank you all so much for taking, time on this lovely day. I hope you got something out of it. I hope you are invigorated to budget, and we'll see you next time. Alright. Bye, everybody. Thank you, Andrew. Thank you.