What Happens When Things Change
Monday December 13, 2021
Any accounting business and tax advice contained in this podcast is not intended as a thorough in depth analysis of specific issues. Nor is it a substitute for format information. Nor is it sufficient to avoid tax related penalties. If you have specific questions that you need advice for, be sure to schedule a strategy session and not solely rely on information in this podcast. All right, back to the episode.
Hey, welcome to another episode of The Nonprofit Ace Podcast. I am your host, Chyla Graham. And this episode, I wanted to talk about what happens when things change. So it's budget season or the end of budget season depending on what things look like at your organization. And I want to tell you about a time where we approved the budget, and then things changed drastically.
I want to say it was 2014, I was working at a school and one of the big drivers for funding there was government support. The way they operated, they got support from the local government. It was part of the budget process and as we all know, when the government is your primary driver and budget negotiations are happening with your senate and your Congress, things get dicey.
So what happened was we got through putting the budget together, we got it approved and then the fiscal year started. A couple weeks into it we were notified that they didn't approve the budget. So the numbers that we had counted on as an organization, the local government said, actually, you're not going to get that.
We had to rethink things drastically about how we are actually going to put things together? And we had to be honest and transparent because of course, we know that our programs don't exist without personnel. We had to really think about what this means for the way we're going to change our services? What do we need to say to our staff so that they are aware of what's happening? Because people can read the news, they can know, like, hey, this budget didn't happen, or this thing didn't happen the way that people thought it was gonna happen.
And so being upfront is the first thing. If you know that, there's going to be a big budget change and it's after you thought things were set in stone. Be honest with your team about what next steps look like. If you don't know, let them know that you don't know. Give them some runway, though. Let them know Hi, in four weeks, in six weeks, we're gonna come back to you with this information so that you can make the best decision for yourselves.
The other thing to think about is what do you need to communicate externally? So for the people who rely on your services, what do you need to say about what hours you're going to be having? What do you need to say about the capacity you're going to have for the year? All of those things are things that you should really think about before you go public.
So before you make any big announcements, or big changes, really take some time and say, I want you to be aware that some changes are happening, we are going to release this information on this timeline and we'll keep you posted. We'll send out a newsletter, we'll send out an email, we'll have a town hall, however, you're going to fully communicate that it's going to be essential so that people can retain the trust.
The other thing to make sure you're going to do is talk to other funders. And this is why it's really important that you think about your revenue mix on how is it that money your organization is surviving? If you're really reliant on one funder, and that funder suddenly changes? What can you do? And so really think about how we are going to diversify our revenue sources.
How are we going to spread things so that our risk doesn't lie in one vendor or one family, one government body? So if you haven't already, take some time now to really think about if things were to change, what would that look like?
Not because you want it to change but because I want you to feel like we have thought this through. We have thought through what the possible scenarios are going to be. So that when life changes unexpectedly, you have some idea of what to do next. Alright. Bye. Thanks for listening to another episode of The Nonprofit Ace Podcast.
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