Budgeting Your Way to Financial Stability

2002, 116 pages. Larson, Allen, Weishair & Co., LLP, Minneapolis, Minnesota. Distributed by LarsonAllen Public Service Group, (612) 397-3301 or (888) 529-2648, psg@larsonallen.com, Larson, Allen, Weishair & Co., LLP

For some artists seeking grants from our arts council, budgeting is an angst-ridden, dramatic exercise, repeatable annually for the purpose of collecting small project grants. Yet the majority of artists and founders of nonprofit organizations master budgeting for an operational year, often with the assistance of trustworthy fiscal managers. This book could be of tremendous help to burgeoning nonprofit managers in the early years of their organization's development.

Written for small and mid-size nonprofit organizations, Budgeting Your Way to Financial Stability is a guide to creating budgets and using them, with generic worksheets and examples designed to kick-start the process. In the introduction and the first three chapters, the authors dispel the most common myths of budgeting, suggest an eight-step preparation process, and discuss roles and responsibilities for fiscal management. Line item, program-based, income-based, and capital budgets are explained, although the book's focus is on an income-based program budget. Chapters 4, 5 and 6 cover the steps in the budgeting process. Concluding chapters on unit costs and pricing, and on cash reserves and depreciation, are excellent ways to demonstrate how budgets can support decisions to build fiscal stability.

The collective experiences of the highly respected authors shine in the simplicity of the explanations — no definition or description is overworked, which ensures the book's use as a quick reference. The prose is authoritative yet conversational with well-placed affirmations to counter the largest frustrations of budgeting: “Indeed, where would the nonprofit industry be without optimistic leaders who set out each day to do the impossible?”

As a grantmaker, I appreciated references to written fiscal policies and to relevant staff and board involvement in developing the income as well as expense budgets.
Only a few things mar this publication, primarily due to design. Some of the most salient remarks — at least those that mattered to me — seemed to be buried in the layout, which, for example, happened to this important thought: “...it is essential that the board receives monthly financial information that is delivered promptly and presented with a budget-to-actual comparison.” (p.30)

Readers seeking help with budgets will appreciate the clear explanations and definitions, and the handy worksheets and suggestions. Each book includes a CD-ROM with eight useful worksheets in Excel format.

Budgeting Your Way to Financial Stability offers solid advice from beginning to end, and would be a good addition to capacity-building libraries.