Ensuring your department uses the allocated budget funds before the end of the fiscal year is crucial if it is “use it or lose it.” Your department may forfeit any unused funds at the end of the fiscal year, and future year budgets could be reduced due to underspending in previous years.
Here are some opportunities to consider for maximizing your spend to create the most impact.
Strategic Planning
Your organization has worked all year to accomplish its mission. If you have any outstanding funds, you can further advance strategic plans or fund additional projects or initiatives that align with your mission or goals. Investing in strategic planning highlights your organization’s commitment to fulfilling its mission and results in reaching additional beneficiaries.
Capacity-Building
Your department can invest the unused budget in capacity-building initiatives like staff training, infrastructure improvements, or technology upgrades that contribute to the organization’s long-term sustainability through improved effectiveness and efficiency. ‘Use it or lose it’ funds can be an ideal way for finance and accounting leaders to create urgency around purchases that can make an impact on workflows, effectiveness and efficiency.
Eighty-three percent of nonprofit leaders agree that if their organization managed their systems more efficiently, they could better serve their mission.* Consider if your “use it or lose it budget” could be used to improve efficiency within your organization.
Staff Appreciation
Consider using the budget towards recognizing your team. Nearly one in four employees experience burnout symptoms and using a portion of your remaining funds in celebration of your team leads to increased team satisfaction.
Collaboration
Pooling unused funds for joint projects or initiatives with a broader impact is common. For example, if your accounting and development departments have remaining funds, jointly investing in technology that benefits both departments can be ideal. While there’s still time left in the fiscal year, beginning the conversation on any technology investment should start around six months before the end of the fiscal year to roll out in time for the next fiscal year.
Nonprofits can collaborate with other organizations or stakeholders to pool unused funds for joint projects or initiatives that have a broader impact. For example, MIP Fund Accounting and GiveSmart, by Community Brands, help accounting and development teams grow and sustain your organization’s mission. MIP and GiveSmart allow your finance and development teams to benefit from a complete, end-to-end fundraising and accounting platform that scales with your organization, which creates an opportunity for finance/accounting teams to collaborate with IT and/or Development on a modern, multi-purpose, user-friendly tool that can scale with the organization.
Whether through strategic planning, capacity-building, or collaboration, maximizing your “use it or lose it” budget ultimately ties back to how your organization accomplishes its mission. If your fiscal year ends in June, take some time now to see how your department’s spending is trending and uncover if there are some ways to use that budget to set your organization up for future success.
Use your “use it or lose it” budget and MIP capitalize on cost-savings for organizations considering new accounting software–three months of MIP Cloud free when you sign by March 31.
*2023 Nonprofit Research conducted by Pacific Consulting Group.
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