Nonprofit Budgeting: Use Fractional Staff to Fill Gaps
The end of a fiscal year is as much about closing that year as it is about setting up the next one — including creating your annual budget. Even if your financial picture is made up of just a few simple revenue and expense items, there are several excellent reasons to embrace the budget process as more than a collection of numbers.
Your budget provides a valuable framework for monitoring your organization’s health by revealing income gaps and expense jumps before they show up in your bank account. But the budget creation process can be more than that. The conversation about how you plan to acquire and spend resources is an opportunity to envision, or even reimagine, your nonprofit’s future.
Every expense you list is an investment in something that’s supposed to do something. Rent may give you the space to serve your community a meal every day. Your annual CRM subscription gives your development team the tools they need to nurture the relationships on which your work depends.
And then there’s people. Your people line is the most consequential line in your budget. Instead of shooting for an arbitrary headcount or percentage of your total expenses, budget for the expertise and hours you need.
People are tough
Whatever your organization’s purpose, from art programs to healthcare, it is the people on your team who make your work possible. Given the cost and challenge of building a team, it is easy to table staff adjustments again and again, even though you may not have the people required to meet the ever-increasing need, let alone achieve your vision.
Recruiting, hiring, and onboarding a new staff member represent a heavy lift in terms of budget resources and bandwidth. Who has the time? Who has the human resources and legal expertise to help guide the process? And how do you navigate the reality that you likely can’t come up with a competitive compensation package?
If you can get through those issues, the next set of questions is equally challenging. If only one position can be added, which one should it be? A development director? A communications or marketing lead? A tech expert? Administrative support?
You may find yourself doing what many nonprofits do: rolling it all together into one job that no one person could ever do well.
Try a fractional approach
There is a better way. Because a fractional professional fills a role for a fraction of the time, you can take the budget you would have invested in one person and split it across multiple fractional professionals so you have all the skills you need at the level you need them.
You may choose to engage a development director, administrator, data and systems analyst, or even a prospect research specialist — or some combination thereof. If you are the only employee at your organization, the fractional support you seek may look different than what an organization with a larger full-time team needs.
Either way, fractional support gives you access to the range of talent you need right-sized to your organization.
Budget for the support you need
Here’s the thing: if you haven’t budgeted for someone to do development, communications, and admin, You’re adding those tasks to someone’s already overflowing plate who may or may not have the skills required to do them.
As you’re building your next budget, take some time to ask these questions:
Where do we have someone taking on tasks outside their skill set? What are those skills and for how much time do we need them?
What never seems to get done because we don’t have the capacity to do it? How much time do those things require?
What new projects or initiatives are we taking on? Do we have the skills to accomplish them? If we don’t, what skills do we need and for how much time do we need them?
Once you have these pieces down on paper, group skills together by talent area and level. For example, developing a fundraising plan and soliciting donors support fundraising and are at the director level. Updating your CRM also supports fundraising but is at the administrative level.
Your groupings will likely reveal gaps that don’t require a full-time employee on payroll, but do require a person to join your team and do the work.
And that’s where fractional support comes in.
Making the most of the money you have
Budgets are all about the bottom line insofar as you need to have enough coming in to cover what’s going out.
Fractional support allows you to make the most of the money you have. You pay for the time you need — no more, no less. You have the range of talent that you need. And you’re compensating people at the level that matches the work they’re doing rather than overpaying your director to triage the inbox.
This time around, budget for the support you really need.