How to Create a Nonprofit Operating Budget
Keep these benefits at the forefront of your mind as you create your next budget. These might also be helpful reminders for your team The Key Benefits of Accounting Services for Nonprofit Organizations if they need motivation to participate in the budget planning process. The more buy-in you get from your team, the better the process will unfold. Explore all of the different sources of funding for nonprofits, popular funding models, and five simple steps for kickstarting a funding strategy for your organization. Start with your known fixed costs like rent, utilities, salaries and insurance.
Support
Before putting the numbers down, talk to all foundation and corporate donors to determine the likelihood of their repeat gifts. While there will inevitably be some assumptions in your budget, try to work with real numbers as much as possible. Use last year’s numbers as a starting place and include any quotes from vendors or partners. Articulate the main purpose of your budget and think about a structure that will best support that purpose. For example, if the main purpose of your budget is compliance – there might be some elements that you need to include in your budget that you otherwise wouldn’t. Ed is a seasoned professional with over 12 years of experience in the Governance space, where he has collaborated with a diverse range of organizations.
Do nonprofit budgets have to break even?
This allows for a better overview, more speedy addressing of any potential issues, more nimble management of the staff and volunteers, and a more informed everyday decision-making process. Your annual unrestricted surplus should be sufficient to meet debt obligations, fund depreciation, and add to operating reserves. AAFCPAs recommends a 3-5% surplus operating budget each year, and four to six months of expenses in your operating reserves. If you’re creating a budget for the first time, create as reasonable a list as possible of expenses.
Nonprofit Annual Budget Examples to Download
The Global Giving nonprofit budget template is designed to help nonprofits effectively plan their finances. This template simplifies financial organization by providing structured categories for revenue and expenses, allowing for clear tracking and reporting of financial activities. It’s ideal for nonprofits looking to maintain transparency and accuracy in their financial records, helping ensure that funds are allocated efficiently and appropriately towards their mission goals.
You’ll thank yourself later for having worked towards a long-term plan from the start. Do you have a story to share or tips for developing a nonprofit budget? Your board members should have a direct role in https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ developing cash flow projections, agreeing on the assumptions to use, and reviewing the projections carefully.
- You can keep all the information in one excel sheet, or break it up into different pages.
- But make sure you delete any line items that don’t apply to your work and add anything that’s missing.
- Does your nonprofit use small equipment, software subscriptions, or office supplies?
- Whoever does the grant writing will inevitably need some form of the budget to accompany most applications.
A nonprofit budget template Excel creates is pretty similar to a nonprofit budget template Google Sheets does – so don’t be overly concerned about the platform. Proper budgeting can help make sure you use resources effectively, prevents overspending and ensures the financial health of your organization. Even the financially or programmatically smallest nonprofits—often operated entirely with volunteers — have their knowledge of costs spread across two or more people.
Nonprofit Program Budget Template
Consider the impact of any grants or sponsorships, including both new ones you may win and current ones that may shrink or dry up. This can provide a baseline for future budgeting, allowing you to tweak as needed for your goals rather than starting from scratch. Simply collecting this crucial data can go a surprisingly long way toward identifying and solving organizational problems. Monitoring your budget throughout the year is the key to financial success, along with setting aside enough funds for marketing. Take control of your nonprofit’s finances and start building your budgeting skills with these best practices. The master budget is a planning process of aggregation of all the small budgets of the organization to create the final one budget.
- Involve your Board, your staff, and your volunteers in creating the budget and reviewing your revenue and expenses.
- Don’t forget to track restricted and unrestricted funds, and how you are spending them.
- Finding sponsors for your events can help you earmark a larger portion of your fundraising for your mission program expenses.
- Use detailed historical data and consult with your nonprofit program managers to develop accurate estimates of expenses and stay on top of underestimating costs.
- If you have a special project in mind, create a separate budget for it.
Confirm your goals.
A nonprofit budget is a financial document used to plan how an organization will spend its money. It encompasses both your expenses and expected revenue for a set period of time. A nonprofit budget is an important financial document that helps organizations allocate expenses and predict revenue. Your budget is crucial in helping your nonprofit plan for the future, stay fiscally responsible, and reach its campaign goals. Planning is vital to achieving your desired goals in any field of life.