Balance Factory

When including travel in your nonprofit operating budget, think about plane tickets, lodgings, car rentals, Uber fees, and/or driving mileage. This category includes all the costs of hiring and retaining staff—including salaries, payroll taxes, health insurance, retirement contributions, and other benefits. Nonprofit organizations need to budget enough for these expenses to ensure they can attract and retain qualified staff while remaining financially sustainable. Even if your nonprofit is just getting started, it’s not too soon to get into Quickbooks or another accounting software that can help you track and analyze all your income and spending.

Program expenses 🎒

Preparing a real-world budget example for nonprofit organizations can help guide your approach and aid in the decision on whether to use these budgeting methods or another variant. To keep everything organized, your budget categorizes funds into clear nonprofit budget categories, helping you allocate resources efficiently and Accounting Services for Nonprofits: Benefits and How to Choose the Right Provider maintain financial stability. It indicates which items are subject to specific stipulations—otherwise known as restricted funds—which typically make up the bulk of revenue for nonprofit organizations. Take control of your business finances with our comprehensive and user-friendly budgeting template. Effortlessly track expenses, analyze budgets, and achieve financial success for your business.

Sample nonprofit budget layout and key components

This template is organized into the typical balance sheet categories and makes it easy to organize your nonprofit’s numbers. By leveraging these free non-profit templates and tools, you can improve your organizational processes, increase your fundraising effectiveness, and better manage your programs. Explore our offerings and find the resources that will empower your nonprofit to thrive and make a lasting difference.

Zero-based budgeting

Nonprofit organizations must consider multiple funding sources, program sustainability, and the organization’s mission while maintaining fiscal responsibility. Driver-based budgeting helps your nonprofit align its financial planning with operational activities, making adjusting to changes and improving decision-making easier. Think of it as a roadmap that helps your team manage financial resources effectively, ensuring you have the funds to support your programs and initiatives.

Unexpected Ways Nonprofits Can Use AI to Win More Grants

This granular approach reveals insights that traditional budgets often miss, such as hidden costs that could affect program sustainability. As mentioned at the outset, industry data shows that most nonprofits operate with dangerously low reserves, making this aspect of budgeting crucial. Creating a budget for non-profit organizations often involves following historical patterns—budgeting based on last year’s numbers with minor adjustments. By monitoring cash flow closely, your team can anticipate and plan for periods of lower cash availability. It helps prevent your organization from focusing only on total budgeted amounts without considering when the cash will actually be available.

• Optimize your nonprofit marketing budget plan with this dynamic, plug-and-play template.
• Below is an example of a nonprofit budget to give you an idea of what you need to do.
• One of the most valuable results of understanding the true cost of programs is the ability to make wise choices about how to support mission critical work.
• Once you have a good idea of how much money will be coming in, you can then budget for expenses, or how much money will be going out.
• These numbers will often be estimates based on your goals or what you earned and spent last year.
• For example, if you have a strong fundraising track record and anticipate an 80% chance of achieving the predicted $100,000 revenue goal, the forecasted amount would be $80,000.
• While nonprofits and small businesses differ in many ways, managing your nonprofit’s finances similarly to how you’d run a business is essential for success.

• Your nonprofit’s budget will be different, depending on the size, income and expenses of your organization.
• While not a template per se, The Canada Council for the Arts offers a great example of a capital campaign budget for a $10 million campaign.
• Modern accounting software can automate much of this monitoring process, saving time while improving accuracy.
• Sometimes your revenue won’t come from an established program or a product you offer.

Then, take some time to reflect on and learn from programmatic and financial successes and failures. The budget also plays a https://holycitysinner.com/top-benefits-of-accounting-services-for-nonprofit-organizati/ key role in forcing organizations to prioritize their activities so as to determine those that are most critical for fulfilling their mission. The capital budget may include projects which will have ongoing effects on operations. The capital budget can also be used for construction and other big, one-time spending projects that often take more than a fiscal year to pay for.

How to Create a Budget Template

This unpredictability can make it difficult to maintain a consistent income flow, leading to challenges in long-term planning and resource allocation. Are you looking to expand a program, hire additional staff, or purchase new technology? Here’s a comprehensive, step-by-step guide to building a budget that supports your nonprofit’s mission effectively. For more on start-up and small business budget templates, see Free Startup Budget Templates and Free Small Business Budget Templates. In order for nonprofits to determine how much money they require to operate, they need an accurate way to account for all income and costs.

• According to the Nonprofit Impact Matter report 97% have budgets of less than $5 million per year.
• Involve stakeholders in the process, maintain flexible adjustment processes, and establish strong documentation standards.
• You can add or remove categories, adjust budget amounts, and update actual expenses as you receive financial statements or make payments.
• Start with setting clear goals and bringing in key stakeholders—such as program managers and department heads—who can provide detailed estimates of expected costs and revenues.
• Running a nonprofit is hard work, and an essential part of that is budgeting.

Support

For budgeting and allocations we suggest that you separate your activities into distinct programs that will provide meaningful insight into the financial model. As an example, an afterschool program may operate in two locations or be funded by three grants. If the program operates with similar goals, measures, costs, and staff, we’d suggest that these be grouped as a single program. They also simplify monitoring financial progress and adjusting strategies as needed, proving indispensable for both new and established organizations.