As you plan your nonprofit’s 2025 budget, it’s essential to consider program effectiveness and resource allocation. Many organizations may face financial constraints next year due to reduced 
donations and grants. Even if your income remains steady or grows, optimizing your budget is key. Now is the time to review your programs to identify what’s working, what’s missing, and what needs to change.
Gather Insights from Stakeholders
Your community’s needs evolve over time, and your nonprofit programs should adapt. Rather than relying on assumptions about your programs’ effectiveness, gather feedback from clients, members, donors, staff, volunteers, and other stakeholders. Ask which programs they find most and least effective and why. Speaking with community leaders and those familiar with local trends, like journalists can also uncover unmet needs and emerging trends.
Expect diverse opinions on the same program. For instance, staff and volunteers who interact directly with program participants may have a clearer view of a program’s impact than a donor who attends annual events. Show all stakeholders that you value their perspectives, even if final decisions differ from their feedback.
Leverage Data and Metrics
Analyze demographic data in your community to see if shifts impact your program offerings. Establish specific goals and metrics for each program if you haven’t already. Program measurements will vary, but aim for metrics that are strategic, realistic, and timely. For example, a professional association might assess its education program by comparing year-over-year enrollment or looking at enrollment percentages relative to total membership.
Use a mix of quantitative and qualitative measures before deciding on program funding. Numbers alone may not capture the passion beneficiaries feel for a particular initiative.
Redirect Resources Thoughtfully
Once you’ve evaluated your programs, it may be easier to identify outdated initiatives than to decide on new ones. If a program is clearly underperforming while another exceeds expectations, reallocating funds can be a straightforward choice. But what if none of your programs are effective?
New programs can build on past programs, but they should align with your mission and values. You should avoid repeating past mistakes. And remember to create a balanced budget for each initiative, overspending or underspending can limit effectiveness.
Foster a Lean, Impactful Operation
If evaluating and trimming underperforming programs proves useful, consider making this review a regular practice, perhaps annually or biannually. In uncertain financial times, minimizing waste is critical. Reach out to us with any questions.
