5-Year Financial Planning

Five-year financial planning goes hand-in-hand with the council’s strategic plan. In many cases, councils have written and adopted strategic plans that have outlined desired outcomes over a 5-year time horizon, but never created a financial plan to support it.

Likewise, many of our councils are experiencing financial discomfort and some financial distress. This did not happen due to their financial performance in just one year. This process and tool can assist council leadership to define a path forward, and quickly see long-term results that minor changes of behavior or performance can make.


This site is designed to help councils understand the five-year planning process and the five-year planning model that is integral to the process.


  • Watch the above video. The video refers to a sample council.
  • Download the current-year model and read the instructions.
  • Gather the financial information for your council:
    • The past five years financial statements
    • The current year budget
    • The spending policies and growth projections for the council’s endowment fund
    • Membership data
  • Enter the requested information
  • If the output does not provide for the growth needed to sustain and grow the council, re-plan and re-enter data.
  • When satisfied with the output ask the three critical questions:
    • Does the plan provide for growth?
    • Is our council organized to deliver the plan?
    • Are the right volunteers in place to deliver the plan?
  • Review with the area professionals and volunteers.
  • Gain approval from your council executive board.


The above presentation was made on October 15, 2012, to the National Finance Impact Support Committee.

Helpful PowerPoint Presentation – 5-Year Plan with Membership Example



Q. What should a Council be looking for at the end of five years?

A. The Council should be able to fund growth including the additional staffing and programs needed to provide that growth and, as well, end up in five years with a budget that is balanced or has a surplus, a positive and strong unrestricted net assets balance in the operating fund, and a strengthened council endowment.

Q. What is the proper level for the Unrestricted Net Assets in the operating fund?

A. The BSA recommends that the unrestricted net assets in the operating fund at the end of the year should equal one third of the operating expenses for the year. For example, if the Council budget is $1,000,000 per year it would have a great deal of financial security if it had Unrestricted Net Assets of $330,000 at the end of the year. For most Councils this would be difficult to achieve in one year but significant progress could be made over the course of a five year plan.

Q. What is the proper level for the Endowment?

A. Again, BSA has a recommendation which is that a 5% draw from the endowment should equal 20% of the annual operating budget of a Council. Simplified, this says the endowment should be four times the operating budget. To use the example from above, a Council with an operating budget of $1,000,000 would have some financial security if it had an endowment of $4,000,000. As in the example of unrestricted net assets, creating an endowment of this size in one year is unlikely to happen, but a plan to increase the endowment over a five year horizon could actually achieve or make significant gains against this goal.


Financing Not Fundraising: Connect Money to Your Strategic Plan By Nell Edgington (Social Velocity)