Budgeting: A 10-Step Checklist

In this method, your nonprofit senior management first develops a high-level budget for the organization. Such changes could include the addition of new funding sources or new restrictions dictated by existing donors. Set aside a portion of your budget for unforeseen expenses or emergencies. This fund will provide a financial safety net and allow your organization to respond to unexpected events without jeopardizing its financial stability. Fixed costs are expenses that remain constant, such as rent or salaries, while variable costs fluctuate based on activity levels or other factors, such as utilities or event expenses. If you’re looking for additional ways to streamline operations and fundraising, take a look at Sumac’s donation management software.

RESOURCES

If there’s a significant discrepancy, the organization can then investigate the causes and make necessary adjustments, ensuring financial stability and sustainability. To help you through the budgeting The Key Benefits of Accounting Services for Nonprofit Organizations process we’ll walk you through every line item you might need to include and show you how to create your own nonprofit organization budget template. Once you’ve created your nonprofit budget, you’ll be on track to secure financial stability and sustainability for your organization. A program budget focuses on the specific financial requirements of a particular initiative or project. Nonprofits must create program budgets to showcase the direct impact of donations and grants.

Operating Budget

These templates are designed to assist organizations in managing their budgets effectively, with features that help track income, expenditures, and analyze financial data to make informed decisions. Ideal for nonprofits seeking user-friendly, comprehensive budgeting solutions, these templates ensure financial processes are streamlined and transparent. Thankview’s Nonprofit Budget Template is specifically designed to help nonprofit organizations manage their finances effectively. It offers a user-friendly layout that allows for detailed tracking of both income and expenses, ensuring that organizations can maintain oversight of their financial health.

• When putting in the numbers for your revenue, make sure you know exactly where your funds will come from.
• Determine the amount of funding needed for each of your organization’s programs and services.
• Learn all the best practices of CRMs to simplify customer relationship management and elevate your bond with loyal customers.
• Once the initial budget is drafted, review it with stakeholders to identify potential gaps or misallocations.
• The second is to make sure that the expenses are in line with the goals of the organization.
• Using these programs, you can easily set up financial reports that display the organization’s finances over time, track expenses and revenue, and create graphs that display your financial data over time.

Benefits to budgeting for nonprofits

• This nonprofit budget example caters to nonprofits who need to send cash flow projections and budgets to funding organizations in order to secure grant monies.
• If you use your checkbook alone to guide financial decisions, you could find yourself in trouble quickly.
• It helps prevent your organization from focusing only on total budgeted amounts without considering when the cash will actually be available.
• Some organizations might also include admin or facilities expenditures in their program budget allocation.
• Rushing the budgeting process could cause errors, which could result in future issues – especially troubling for nonprofits who need to report their finances and budgeting to grantors.
• His time at Amnesty reinforced Steve’s life-long commitment to giving back to the community through charitable causes.

I know that not everyone is comfortable with numbers and that budgets can be overwhelming. Then when no more revenue comes in that month, you may find yourself unable to pay bills or make payroll (not fun!). If you use your checkbook alone to guide financial decisions, you could find yourself in trouble quickly. I’m not sure how they knew what they were doing, how much money they had, when it was ok to hire someone, or when to expand services. You must have one to guide your path and to show funders your operations described in numbers.

Budgets form the basis for boards to make better decisions and to avoid making mistakes. Budgeting allows boards to put limits on certain expenses as necessary and work to increase income sources early when it looks like there may be a shortfall. Monitoring the budget also provides an opportunity for board directors to move money around to allocate it efficiently as their cash flow changes. Here’s a very basic example—but remember that your organization’s budget might be more complicated than this (or maybe even simpler!). To learn more about annual business budget templates, that can be used across different organizations, see Free Annual https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ Business Budget Templates. His growth-hacking abilities have helped Donorbox boost fundraising efforts for thousands of nonprofit organizations.

Zero-based budgeting requires your financial planners to evaluate each expense based on current needs, starting from scratch for each new budgeting period. It outlines your projected income and expenses over a specific period, usually a fiscal year. Because nonprofit revenue streams can be unpredictable, and it’s easy to prioritize program funding over internal needs.

• ‍He’s quick to remind his clients that a realistic budget is a winning budget.
• They will be able to help you create a budget that meets your needs and ensures that your nonprofit is financially stable.
• Understanding your restaurant balance sheet is essential for keeping your finances on track.
• Thankfully, Google created a grant to help nonprofits budget for marketing.
• Finally, the board or budget committee should be ready to present the annual budget to any necessary committees and the board for final approval.

Propel Nonprofits video about depreciation, which can be confusing but is an accounting concept we can all understand. These items are often overlooked and can significantly undervalue a nonprofit. Also make notes about any services or supplies that someone is donating and whether it’s just for this year or from now on. Use last year’s actual numbers as a starting place and get quotes from vendors for new or expanded expenses.

• You can use a capital budget to ensure such initiatives have minimal impact on daily operations.
• This will help you set realistic expectations and make informed decisions when creating your budget.
• 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.
• Because nonprofit funding is often very flexible, it’s absolutely necessary to have many diverse revenue streams.
• If you are still unsure of how to develop a budget, you can consult with a financial advisor or accountant.
• A nonprofit budget template is a fillable document that simplifies your budgeting.
• Since we’re in the business of helping nonprofits, and creating the tools they need to do more good, we wanted to help by creating a sample nonprofit budget template that is free to download and use.

A nonprofit operating budget is different than the capital budget, and it plays an important role in budgeting for nonprofit organizations. Your capital budget includes projects that have an ongoing impact on your operations. A capital budget is also used to plan for major expenses like construction costs and other big, one-time expenses that take more than a fiscal year to fund. In this article, we will discuss what should be included in a nonprofit budget, how to create one, and provide a template and example budget to help guide you through the process. Finally, budgeting software programs like Xero or QuickBooks are excellent tools for creating nonprofit budgets due to their ease of use and robust features. Using these programs, you can easily set up financial reports that display the organization’s finances over time, track expenses and revenue, and create graphs that display your financial data over time.