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Nonprofit Budgets Have to Balance: False!

by Brenda Peluso

As nonprofits serving people and communities in these difficult financial times, we don’t expect things to turn around for our communities in the near future. Many of us are wondering: how can we achieve a balanced budget in these times? When is it okay not to have a balanced budget? A potentially harmful habit practiced in many community nonprofits is presuming that a break-even budget is mandatory. Board members and staff may be under the influence of the false but persistent ‘nonprofits can’t make money’ myth as they develop the year’s income and expense plan.