I've spent the last week poring over financial reports for one of our funders. As a nonprofit agency director much of my time is spent identifying gaps in our budget, looking for funding and trying to find ways to make ends meet. It can be a real headache balancing different fiscal years and reporting requirements.
Sometimes I wish our budget could be portrayed accurately with an easy profit and loss spreadsheet. I Tweeted my issue (@OpenDoorED) and a business friend of mine responded with the title of this blog posting. It makes sense to me from a business perspective that budgets are pretty clear cut. Either you are making money or you are losing money. Does this work for a social agency like the Camrose Open Door Association?
On a literal level the answer to this question is obvious. Of course, we need to try to match our spending with our income or we won't last long as an organization. However, on a deeper level, the value of what we do is not accurately portrayed by a budget number. Are we willing to spend more to make a difference in someone's life? How do we quantify the social return on investment of programs like ours?
Red numbers might indicate an unmet (unfinanced need) that our organization is working to fill. For example, providing housing to youth in our community. We feel that providing this service is essential to our mission and needs to be done. A red number on our financial report might highlight an area where we are best fulfilling our mission.
Part of my job as ED is to identify these red numbers, ensure they are important to our mission and find ways to pay for them. Maybe they aren't so bad after all.
Any suggestions?
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