Often when nonprofits are in a tight pinch financially, their budget for marketing materials is the first place they look to cut back. Generally, this creates a short-term solution to a major financial problem instead of focusing on the long-term marketing and strategic implications.
Your marketing strategy is what brings your supporters to donate and helps fund your mission and other internal operations. It’s a key piece of the funding cycle for your nonprofit. To build a sustainable nonprofit, you should get to the core of budgeting issues needs instead of simply cutting back on vital marketing needs.
The best way to avoid disturbing this funding cycle is to identify the opportunities for efficient planning then create an effective budget for your nonprofit.
To create a budget for your nonprofit that will maximize the use of your marketing opportunities, take the following steps toward success:
Crafting a marketing strategy with an effective budget for your nonprofit now will save you a lot of time, energy, and money in the future. Let’s get started to learn more!
The first step your nonprofit should take when preparing your marketing budget tips is setting goals. These goals should follow the SMART goal-setting method, meaning the goals should be:
An example of a SMART goal for a nonprofit may be: Raise $2,000 as a part of a crowdfunding campaign within the next two months to buy 3 new computers for a local school. This goal is specific and measurable in the amount of money that needs to be raised. The goal is attainable and relevant for the goal of enhancing education opportunities at the school. Plus, the 2-month timeframe makes it timely.
Using goal-oriented budgeting strategies changes the perspective of your staff members and financial professionals in terms of your marketing strategy. Instead of viewing line items in your budget as an expense for your nonprofit’s annual budget, you can start seeing them as opportunities to enhance your organization’s services.
If your nonprofit is struggling to come up with marketing goals to help you achieve your fundraising objectives, consider talking to a consultant. Consultants help nonprofits set their goals and develop a concrete plan to achieve them. However, make sure to factor consultant fees into your budget if you choose to go this route! Click here for a helpful article about fundraising consultant fees.
Once you have these goals written down, it’s time to determine the initiatives your nonprofit will need to take to achieve them. These initiatives make up the expected outcomes that we’ll discuss further in the next section.
Once you’ve created effective goals, your nonprofit should define the benchmarks, or expected outcomes, that you’ll need to achieve to reach each goal. Defining the cost of these expected outcomes requires a specific approach that differs from other types of organizations.
When your nonprofit first started refining your budgeting process, it’s likely you used the percentage or dollar method; either you chose a specific percentage of your budget to allocate towards marketing or a specific dollar amount.
These processes share one fatal flaw: They require you to begin budgeting primarily from the perspective of your finances, instead of your expected outcomes.
These processes are more effective for businesses, who generally approach budgeting from a top-down or bottom-up perspective starting with their finances. However, nonprofits operate slightly differently when it comes to budgeting. Because the finances at nonprofits tend to have a high rate of fluctuation, many organizations prefer to work backward, building their budget around their goals.
When nonprofits create their financial plans, they do so on a fund accounting system. Fund accounting takes into consideration the restrictions and allocation preferences associated with donations and grants, which are nonprofits’ main sources of income.
This also means that nonprofits tend to have access to a less steady and more restricted source of income. When you consider the inconsistency of income, it makes sense to realistically set goals first and plan fundraising campaigns that will help you meet the financial needs of those goals.
This is more effective than relying on your annual campaign to the funds because you can market campaigns more or less aggressively depending on the expected outcome you want to reach.
If you find it difficult to pull reports about your past financial data, it might be time to rethink your accounting software. This nonprofit accounting software article by Community Brands will help guide you through the various features you need in a software solution. The best accounting software leads to more accurate reports, effective budgeting, and financial stability.
When you’re planning out your marketing budget, take note of the software solutions your nonprofit currently uses for its various marketing efforts.
Technology plays a major role in your marketing strategy, so conducting a minor evaluation (or a complete overhaul!) of your digital marketing strategy can help many nonprofits consolidate tech and create more room in their budget.
The perfect software solutions are those that are highly functional and integrated with your other solutions. Let’s explore these two criteria a little bit deeper:
An example of a highly functional software is content creation platforms, like Promo.com, which allow your nonprofit to create and share professional videos on your website, social media, or other digital platforms.
You should also be sure to look for software solutions for:
Look for software that offers multiple functions in a single solution. For instance, some CRM software may include marketing automation features or peer-to-peer fundraising.
Working with a robust software platform with multiple functions built-in will help your nonprofit save energy and money that would’ve been invested in the installation, training, and payments for various solution types.
Collect data with cost estimates from previous years as well as outside research to determine the cost of each solution.
Ironically, you also use software to plan out your expenses for other software. Be sure your nonprofit accounting software makes it easy to create your software budget in addition to your marketing budget (and any other budgets you may have).
Software solutions, such as MIP Fund Accounting, allow you to track budgets and overall financial standing to measure the success rates of your marketing plan. After all, what good is a budget if you can’t track and maintain it?
Your marketing budget items are the driving force behind donations and funding.
Therefore, you can use fundraising campaigns and efforts to get the word out and market your nonprofit’s name and brand among new audiences, especially through the online networks of your current supporters. By incorporating these types of fundraising efforts into your nonprofit strategy, you’ll hit two birds—marketing and fundraising—with one stone.
Combining these strategies helps nonprofits efficiently save money while accomplishing their goals. This way, nonprofits on a tight budget can still reach their potential.
Plan ahead to combine some of these strategies to maximize the impact of your budget. Some classic examples include:
If your nonprofit is looking for some additional room in your budget, check to see if using combined strategies for your marketing and fundraising will help you achieve your goals.
Budgeting is a tool for nonprofits to prepare for an upcoming period of time. Generally, a nonprofit plans for a year’s worth of budgeting. This annual budgeting system is great, but sometimes you need to be sure you’re prepared for more than just the next year’s marketing budget.
To be ready for the long-term future, your nonprofit will need accurate records detailing the processes you went through to come up with a multi-year marketing budget.
This means tracking:
Preparation is key to crafting future nonprofit budgets. Look for the best accounting software solution that allows you to compare the previous years’ budgets to the current one. This will give you a timeline to watch as your marketing budget becomes more and more accurate.
Marketing for nonprofits is important to help you acquire new supporters and guide them through the remaining part of the fundraising cycle. Therefore, marketing is the driving force behind your nonprofit’s financial success. These five tips will help you create a detailed and accurate budget to maximize the efficiency of your marketing strategy. Good luck!