What Your Organization Needs to Know about Nonprofit Budgeting

As such, organizations must be prepared to adapt their budgets accordingly. Include key stakeholders, such as board members, staff, and volunteers, in the budgeting process. This will ensure that everyone is aware of the organization’s financial position, goals, and priorities, and it will help create a sense of ownership and accountability. Before you begin budgeting, establish your organization’s goals and objectives for the upcoming fiscal year. Clearly defining these will help you allocate resources effectively and guide decision-making throughout the budgeting process.

How to Fill Out the Budget Template

At this point, the budget committee should have a draft budget ready and do a thorough review of it. The review should include verifying that the budget is able to meet program and organizational goals. Budget planning includes some degree of forecasting and assumptions and boards should thoroughly vet assumptions before finalizing the budget. They should make any final adjustments based on the organization’s goals and its capacity to match income and expenses as closely as possible. In addition, they should review the final draft against the organization’s goals and objectives. Start with a nonprofit budget template excel sheet that includes all the expenses you can think of.

What tools should I use to create a nonprofit budget?

Running a nonprofit is a lot like learning to juggle—exciting as the skill is, it’s harder than it looks! If you’re looking for a https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ way to keep all those balls in the air, nothing is more valuable than a foolproof nonprofit budget. Whether you’re submitting a grant proposal or planning for a new project, this template will help you build a strong, clear budget funders will appreciate. Many nonprofits seem to not only operate on shoestring budgets but are also proud of it.

Calculate your nonprofit’s expenses 📊

Whether you’re managing general operations, launching a new program, or amplifying your marketing efforts, a thoughtful budget can be the difference between a successful year and a strained one. The template’s operating expenses section allows you to easily determine your rolling cash balance. This guide and accompanying spreadsheet template from Propel Nonprofits breaks down the process of understanding true program costs—whether through budgeting or financial reports—into several stages. Board management software is a valuable tool in assisting nonprofits in budget planning. BoardEffect provides a secure platform for board communications where they can share confidential documents about the budget and other important board matters without concern over hacking.

• Programs are more effective, better managed, and more responsive to the community when an organization has good accounting and technology, high quality leadership, planning, and governance.
• This is where the budget becomes an effective management and operations tool for your organization.
• Keep in mind the difference between fixed and variable costs when you are tracking expenses.
• Use this budget for nonprofit project template to determine where you have room to grow and where you might need to cut back.

It can be tricky to accurately predict how much you’ll raise from each source and categorize these funds appropriately. If you need assistance, reach out to a nonprofit accounting firm that can take care of this forecasting and reporting for you. Track your organization’s financial performance against the budget throughout the year, making adjustments as needed to respond to changing circumstances. Regularly reviewing the budget will help you identify potential issues early and allow for accounting services for nonprofit organizations more effective decision-making.

• It can also help to identify areas where the organization may have been overspending or under-earning, which can then be addressed in the budget.
• This budget model helps you track each program’s financial performance separately, ensuring funds are used effectively and in accordance with donor or grant requirements.
• The budget should be maintained using cash flow forecasting, forecasting revenue and expense, and analyzing expenditures’ effectiveness.
• In this section, we’ll look at a few key steps you’ll need to create an effective nonprofit budget sample.
• They will be able to help you create a budget that meets your needs and ensures that your nonprofit is financially stable.
• Budgeting is a fundamental aspect of nonprofit management that often determines the success or failure of programs aimed at fulfilling the organization’s mission.
• Adjust the nonprofit program budget according to the feedback that you have received, if there is a need for it.

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Make your goals SMART—specific, measurable, actionable, relevant, and time-bound. If you want to move into a new office space this year, you can estimate the rent. If you want to hire a new marketing director, you can look up salary trends to discover how much you need to pay them. When budgeting, nonprofits sometimes make the mistake of forgetting to account for in-kind donations or volunteer hours. Your board members should have a direct role in developing cash flow projections, agreeing on the assumptions to use, and reviewing the projections carefully.

Figure out your expenses

The first essential element is revenue, which includes all anticipated income sources such as donations, grants, fundraising events, and program fees. Accurately forecasting revenue is crucial, as it sets the foundation for the entire budget. Nonprofits should analyze historical data and current trends to make informed predictions about future income. This process may involve engaging with donors and stakeholders to gauge their commitment and willingness to contribute. There are many resources to assist you with creating your own budget after you’ve considered all of the direct and indirect costs of your project.