5 Spending rules that Everyone should Know

Handling donated funds is a tremendous task. It calls for responsibility and honesty in spending. Spendthrifts are driven by “spend triggers” which can bankrupt NGOs. It doesn’t matter if the money handled was earned or donated. Big spenders running NGOs have reckless spending habits which are encouraged everyday by retailers.

There are many guidelines on cultivating great spending habits, most of which are at our fingertips. A challenge for many is how to implement those guidelines.  

Here are 5 rules that everyone should know:

  • Automate everything

Technology was invented to make our lives easier. Laggards who are slow at adopting the latest technology struggle with many things. Tracking finances becomes a time-consuming effort, and accessing important documents like statements remain a mad scramble. Payment of bills always costs them extra bank charges because they choose to do it the old way.

By automating financial processes you’re not only tracking NGO donations but also managing donated funds more responsibly.

  • Setup budgets with due diligence

Taking the time to set up budgets is not always fun, and sticking to budgets even more so.

For NGOs, it’s crucial to set spending limits. Planning methods like creating a Financial Planning Worksheet can save the day. This makes the planning process easier as plans can be updated when necessary. This decision will maximize chances of receiving future donations.

  • Plan for the unexpected

We are all made to believe that planning for the future is important. We save for retirement, we invest for future education for our kids and we always put something aside for holidays. Only a few of us plan for the unexpected.

There’s no guarantee that your charity organization will be able to raise money in the future. You expect to receive more funds so you can continue to do good. Lack of planning leads to waste. Those who set financial goals, long; medium and short; are likely to spend more responsibly.

  • End wasted spend

You know it’s time to reconsider your spend when your costs exceed your income. This may call for seriously considering your spend, maybe even adjusting your lifestyle. Eat only once a month in restaurants and spend less on entertainment etc.

Your NGO is no different. Unpredictable economic conditions may force you to plan your finances. Expenditure like renting elegant offices may have to be cut out. In order to end wasted spend you have to reconsider your purchasing process.

Answer: An efficient automated system like can help monitor spend efficiently and here’s how:

  • Monitor all your purchases

The reason why a big-spender’s financial position cannot improve is because they never monitor their purchases. Every month they continue living beyond their means. Their impulsiveness only aggravates the problem.

NGOs are not spared this problem. Funds budgeted for charity activities may be wasted on expensive furniture, limousines and other expenses. NGOs with opaque purchasing patterns tend waste a lot more. This is because managers cannot monitor purchasing transactions as they happen.

The solution: The problem can be addressed with an automated purchase order system like With purchasing processes are streamlined and managers get a real time view of spend. The system is easy to use, so no training is needed. Every transaction is tracked and approved via e-mail so errors can be corrected immediately.

See how Unicef does it all.

Comments/questions are welcome.

More Resources