Jul 17, 2020
“A nickel ain’t worth a dime anymore.” This priceless quote from the late Yogi Berra, the witty, retired baseball professional who passed away on September 22, 2015, reminds us of the financial necessity of keeping track of our budgets. For charities, the last quarter of the fiscal year is the time that most organizations finalize their expenditure plans for the coming year.
A charity’s budget is more than just a table of expected expenditures; it represents a cornerstone of good stewardship. While a charity’s audited financial statements and IRS Form 990 usually get the lion’s share of public attention, these items are historical and tell us where the organization has been, not where it is going. In contrast, a budget shows how the charity intends to spend funds in the current or coming year and will reflect any changes in program priorities and/or new activities.
One of the BBB Standards for Charity Accountability (Standard 14) specifically calls for charities to have a board-approved budget for the current fiscal that includes certain information. Specifcally, this standard calls for the budget to identify the projected total amounts to be spent on program activities, fund raising and administration. Such an expense breakdown will help the board gain a better understanding of how the charity’s resources will be used. While a table of budgeted expenses in natural categories such as salaries, postage, travel, etc. provides essential detail, the recommended allocation totals helps complete the financial picture.
Also, budgets are not a once a year charity activity. Well-managed governing boards will periodically review the budget in relation to actual revenues and expenses and adjust activity, as needed, based on available resources and/or changes in activity plans.
On a separate note, as part of our Building Trust Video Series, we are pleased to provide the following video that features Gail McGovern, President & CEO of the American Red Cross. With total revenues of about $3 billion, more than 450 chapters in all 50 states, over 25,000 paid staff members, 400,000 volunteers and responding to nearly 70,000 disasters large and small each year, the American Red Cross is one of the largest American charities in existence and one of the most recognized charity brands.
We are always working with charities to publish or update reports for donors. Visit Give.org or local BBBs to check out any charity before giving. Our recently evaluated charities include:
Finally, remember to let us know by going to https://give.org/ask-us-about-a-charity1/ if you are interested in seeing a report on a charity not on the list and we will do our best to produce one.
H. Art Taylor, President & CEO
BBB Wise Giving Alliance
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BBB Wise Giving Alliance provides charity reports, which help donors review charities and find a trustworthy charity to support. We also conduct charity assessments to help charities improve their practices and demonstrate trust.
BBB Wise Giving Alliance provides charity reports, which help donors review charities and find a trustworthy charity to support. We also conduct charity assessments to help charities improve their practices and demonstrate trust.
