Choosing how best to allocate a budget amongst competing priorities is challenging, even for corporations with a laser-like focus on a single bottom-line. For non-profits of various sorts, including charities, NGOs and professional membership organisations, there are extra dimensions that need to be considered.
First, there is the question of how ‘value’ is measured. By definition this requires value-judgements, and making trade-offs between different types of value calls for special techniques.
Secondly, non-profits often have a wide base of stakeholders (internal and sometimes external) who care about how these value judgements are being applied to prioritising activities and investments. These stakeholders need to at least understand how it is being done (transparency), and ideally they will also have some say in the process (participation).
We have helped a number of charities and NGOs over the years, so we do appreciate these challenges. More recently we have worked with a large professional membership organisation, and found that they operate in a similar context. We ran a process with them to engage groups of members in scoring their programs (the current portfolio and proposed new initiatives) against a set of criteria aligned with their strategic objectives. This brought the members views directly into the decision-making and budget setting process.
You can read more about this in a brief case study we have recently published. We are expecting to do more work in this area, and will aim to produce further case studies when we can, but in the meantime if you would like more information just let me know.