10 tips for creating budgets at nonprofit organizations

This is a good time to review the current year’s actual income and expenses against the budget. Boards should analyze variances and consider if there will be any impact on the upcoming budget. This is also a prime opportunity to clarify the annual goals from the strategic plan. A nonprofit budget is more than just a collection of numbers; it’s a strategic blueprint that reflects an organization’s priorities, goals, and mission at a foundational level. It outlines expected income and planned expenses for a specific period, typically a fiscal year, ensuring that resources are allocated efficiently and transparently. For nonprofits, budgeting plays a pivotal role in aligning limited resources with their mission-driven objectives.

Nonprofit Financial + Budgeting Software to Consider

Determine the amount of funding needed for each of your organization’s programs and services. Keep your goals and objectives in mind when allocating resources, ensuring that they are aligned with your mission and priorities. Seeing these things side by side gives you the tools to decide how you can best use your resources. Your nonprofit budget is meant to be a flexible document that changes as your circumstances do.

What Is A Nonprofit Budget?

This means that the money behind the balance you see in your account is held at a reputable bank, and most importantly, is protected for you in the event of Currencycloud’s, or our, insolvency. Currencycloud stops safeguarding your funds when the money has been paid out of your account to your beneficiary’s account. For example, if you are seeking a $10,000 grant with a 75% chance of being awarded, adjusting the revenue forecast to $7,500 accurately reflects the projected income.

Organize your expenses by function

The software also provides valuable real-time reporting, allowing for mid-year budget to actuals comparison reports. These reports offer insights into the organization’s financial health by showing how actual income and expenses line up with budgeted figures. If there’s a significant discrepancy, the organization can then investigate the causes and make necessary adjustments, ensuring financial stability and sustainability. ACCOUNTS software facilitates the creation of annual budgets by providing a clear, organized platform. This helps non-profits plan their financial year efficiently, making it easier to compare actual income and expenses against the budget throughout the year. See the reviews below of some of the more popular Google Sheets nonprofit budget templates that are available at no cost to your organization.

How to Calculate a Nonprofit Operating Budget

With these features in mind, let’s dive deeper into the two sides of your nonprofit’s operating budget. If you don’t have a fundraising history to work from, you can use a fundraising goal as a starting point. This can be based on the amount of money you need to raise to cover your expenses, or it can be a specific dollar amount that you would like to raise. Historical budgeting simply means using the previous year’s budget as a starting point for the coming year’s budget.

• If you want to hire a new marketing director, you can look up salary trends to discover how much you need to pay them.
• Remember that underfunding these areas often leads to inefficiency and reduced impact over time.
• For a budget plan that you can use for the entire year, check out our collection of Yearly Budget templates.
• Because, a non-profit organization, literally as its name, does not receive any finances, or monetary gain through their services.
• There are several ways to manage budgeting for nonprofit organizations.

Additional Types of Nonprofit Budgets

A budget for non-profit organizations becomes more effective when broken down by program expenses. Program-based budgeting helps you understand the true cost of each initiative, measure actual performance, and make informed decisions about resource allocation. Every successful budget for non-profit organizations balances mission impact with financial stability. Understanding and managing both fixed and variable costs helps you make smarter spending decisions and maintain financial flexibility. These elements work together to create a comprehensive financial framework that supports both day-to-day operations and long-term strategic goals. Above all, a budget for non-profit organizations must remain flexible enough to adapt to changing circumstances while accounting services for nonprofit organizations maintaining fiscal responsibility.

• Your administrative and fundraising expenses put together make up your nonprofit’s overhead.
• Again, be careful not to overestimate your revenue just to get a zero bottom line.
• Cash flow refers to the monthly movement of money coming in and out of your organization.
• But if you’ve never created a budget or thoroughly reviewed your finances, it can feel overwhelming.
• Once all expenses have been accounted for, you can then begin to allocate funds to each category.
• Repeat this exercise for every line item in your nonprofit’s first budget.
• We have so many different types of nonprofit budget templates here; you can choose anyone you like.