Perhaps the most challenging aspect of being a Nonprofit Imagineer, or a nonprofit employee in general, is reconciling your desire to do big, bold, creative things with the need to stick to your budget. (“What budget? You get a budget???”)
Most of the time, your budget barely covers what you absolutely have to get done. What’s left for that super-cool splurge that your friend who works at Tesla doesn’t bat an eye at picking up for their campaign, while you only get to window shop?
Believe it or not, budgeting is on the mind of every business manager – not just nonprofits. They all need to pinch pennies here and there – even the most opulent, high-end establishments.
Look no further than the sculpture garden gelato cart at the Museum of Modern Art in New York as an example. “That’s an oddly specific small business to narrow in on,” you might be thinking. True, but that’s where Will Guidara, author of Unreasonable Hospitality, chose to stand his ground with his 95/5 rule, so we might as well start there.
In his book, Will explains that being tasked with setting up a gelato cart in the Museum’s sculpture garden gave him the opportunity to create a truly perfect experience. He sourced the finest gelato, made sure the cart itself was a statement piece, and while he stuck to his overall budget, he knew there had to be one specific splurge to send his patrons’ experience over the top. He decided that making this a memorable experience required a memorable spoon. In this case, “perfect” and “budget-friendly” did not go hand in hand.
To make it all work, he took advantage of his 95/5 rule – “Manage 95 percent of your business down to the penny; spend the last 5 percent ‘foolishly.'” Similar to those in the picture above, which can be purchased from the Museum gift shop, Will chose very expensive paddle-shaped spoons that nearly every guest stops to admire as they take their first taste of the decadent gelato. The mere fact that the gift shop sells the spoons tells you something about how effective that splurge was.
Will faced some pushback from his superiors, but as soon as they saw that the budget was balanced and the cart was profitable, Will was soon able to manage it the way he chose.
Understanding How to Use the 95/5 Rule
While most would look at this advice as an optional path to freeing up 5% of the budget in order to do something creative, I see it differently. I challenge you to spend that 5% of the budget creatively every time! I’m not giving you the option. Every single time you do something big (a large event, big fundraising campaign, etc.), budget 5% to splurge with, and ALWAYS use it. When you plan your staff appreciation events for the year, rather than using the money for the usual small tokens and treats that you spread throughout the year, do away with a couple of those forgettable gestures and reserve the money for something memorable. When you budget for your big donor appreciation event, serve one less appetizer or pick a slightly lower budget invitation (which will end up in the trash anyway), and splurge on a creative experience at the event that everyone will be talking about for months to come.
Imagine how much more fun you’ll have, and how exciting it will be for your patrons or guests if every single time they attend your event or participate in your campaign, there is something truly outside-the-box and exciting for them. It doesn’t have to be big. It doesn’t have to be expensive. But scrimping on little things that no one would notice anyway, in order to free up the funds to do something everyone will remember, is what we’re all about as Nonprofit Imagineers. Furthermore, you are still being a fiscally-responsible member of your nonprofit team since you are making up for the 5% splurge by saving elsewhere.
I’d love to hear how you have already utilized the 95/5 rule or plan to in an upcoming event, program, or in day-to-day life at your nonprofit. Send me an email! And if you haven’t picked up your copy of The Nonprofit Imagineers, there’s no time like the present!
Photo credit: https://store.moma.org/products/oslo-ice-cream-spoons
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