Battling Budget Cuts – How a Worst-Case Scenario Leads to Stronger Financial Foundation for a Nonprofit

Written by Carol Coughlin on .

Financial Foundation


For any nonprofit organization, budgeting and creating a sound financial foundation can be a struggle in today’s economic and business environments. When we first met the CEO of this non-profit, a recent and significant cut in funding had left her deeply concerned about the overall financial stability of her organization. The organization had little reserves and its part-time bookkeeper was keeping information “close to her chest,” making it impossible for the CEO to get access to data. The goal of the engagement was to address these issues, figure out the amount of the shortfall and explore scenarios for reducing costs.



BottomLine took charge of the situation by first analyzing and budgeting the overall financials, as well as financials program by program.  Our approach was very different from the organization’s culture in many ways and, especially, in the way we operated under full transparency. For example, we involved the management team in sharing information and in closing the deficit. Additionally, the financial reporting model we developed allowed the organization to perform “what-if” scenarios for various possibilities.



Battling this budget gave the CEO access to information that facilitated expense reductions, program tweaks and funding increases. By rightsizing the program offerings and funding sources, we were able to close the funding/expense gap and create a sound financial foundation and stable financial operations. This allowed the organization to hire a new full-time accountant who now works collaboratively with the internal management team. At the end of the engagement, the organization was working to build reserves, meeting its funding level and was on its way to becoming healthy again.

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