With the end of 2021 approaching, those of you who operate on a calendar fiscal year are likely starting to think about building your marketing and communications budget for the year ahead.
If your organization has faced financial challenges these last few years, as many have, you may be feeling pressured to trim your budget. Marketing and communications are some of the first line items nonprofits choose to cut when uncertainty hangs over their heads or when finances get tight. But that’s a huge mistake.
Marketing, communications and fundraising play a critical role in organizational growth, sustainability and mission advancement, and cutting those budgets at the wrong time can make a tough financial situation even more precarious. Marketing, communications and fundraising budgets are not overhead, but unrealistic expectations from funders are driving too many nonprofits to treat them that way.Marketing, communications and fundraising play a critical role in organizational growth, sustainability and mission advancement, and cutting those budgets at the wrong time can make a tough financial situation even more precarious. Click To Tweet
So how can your organization figure out what it should invest in marketing and communications? It depends who you ask.
Most nonprofits that have a marcomm budget use one of the following methods to establish it:
- The percentage method: Marketing, communications and fundraising (which many nonprofits group as a single line item) occupy a certain percentage of the organization’s total budget–usually somewhere between 5 and 15 percent depending on the size of organization, its structure, whether the budget includes or separates marketing and fundraising, and the organization’s mission. This method makes it possible for marketing to scale as the organization scales.
- The dollar method: Marketing, communications and fundraising are given a set dollar amount based on past expenditures. This method simplifies projections and makes expectations clear.
- The incremental method: Incremental budgets establish a set percentage by which marketing, communications and fundraising budgets will increase or decrease on a regular (usually quarterly) basis based on immediate past performance.
But all of these methods are inherently flawed. Instead of defaulting to one of them as you plan your 2022 budget, your organization should adopt what we call “adaptive, goal-based budgeting.” This approach bases your marketing budget not on a percentage allocation or on past performance, but on marketing’s expected (and measurable) impact on your organization’s broader strategic goals.
Are you ready to learn how it works and start putting it into practice as you shape your budget for the year ahead? Download this free resource on building your nonprofit marketing budget, which will walk you through the process in 11 straightforward steps.
If you have questions about shaping your organization’s marketing communications budget and strategy for 2022, reach out. We’d be happy to guide you in the right direction.
Are you tired of trying to do more with less?
There is a better way to build your nonprofit marketing budget.