Nonprofit Budgeting: Step-by-Step Guide + Free Template

Since this is such an important document for accountability purposes, the layout should be easy-to-navigate, and the relevant applicable formulas should be as accurate as possible. It contains two budgets for different fiscal periods that can be compared to each other like–for–like as you work your way through to the end of the current fiscal year. Compare how your pledged, requested, and other received amounts are doing in relation to each other to determine in which revenue areas there needs to be a renewed focus. Use this free budget if keeping on top of your deliverables and ensuring the execution thereof is of the utmost importance to your organization. Want to see what a ThankView looks like when a supporter receives it? Follow the link to request an example and our team will send you one lickity-split.

Startup Costs / Upfront Investments

While there is generally space for hope and dreams in the nonprofit world, when it comes to budgeting – there isn’t. When putting in the numbers for your revenue, make sure you know exactly where your funds will come from. Monitoring your revenue and expenses should ideally become a part of your nonprofit’s organizational culture, something everyone is aware of and contributes to. Mark the events in everyone’s calendars, so that it becomes easier to repeat the process each year. Your nonprofit’s budget will be different, depending on the size, income and expenses of your organization.

How to create a nonprofit budget in 5 steps

For example, WWF (World Wildlife Fund) frequently reviews its budgets to optimize spending for conservation projects, making data-driven decisions for global campaigns. In FY23, WWF increased spending on conservation programs by 16% compared to FY22. Direct Relief is a great example of how contingency funds can help tackle unforeseen emergencies. It uses its reserve fund to manage unexpected costs during disaster relief efforts. In 2023, it allocated 46% of its program budget ($58.2M) for emergency disaster response.

Nonprofit Project Budget

Program expenses include any costs incurred in service of your mission. Whether you’re providing housing, healthcare, or meals for your community, these expenses are crucial to achieving your nonprofit’s goals. A nonprofit budget should ideally have two sections – one for funding and one for expenses (including overhead and operating expenses). Columns for projected expenses or revenue, what was actually received or spent, and how these differ from one another are also a must. Filling in a clear, simple nonprofit program budget template will give you all the details you need to make https://greatercollinwood.org/main-benefits-of-accounting-services-for-nonprofit-organizations/ strategic decisions. Plus, you’ll feel good knowing everything’s written down and no longer floating around in your head.

• Before starting with what is, essentially, a future-oriented process – clarify the present context.
• Well-developed budgets help your nonprofit be financially transparent with its team, board, supporters, and community at large.
• The Relay Visa Credit Card is issued by Thread Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc and may be used everywhere Visa cards are accepted.
• For more on start-up and small business budget templates, see Free Startup Budget Templates and Free Small Business Budget Templates.
• At least once a quarter (but ideally bi-monthly or monthly), compare actual expenditures against the projected budget to make sure your nonprofit is on track.
• Stay informed about expenses, monitor costs, and enhance the financial performance of your project.

Space comes at a premium, and things like electricity and water need paying for. Make sure you include them as expenses within your budget, so you can see how your costs change year to year. This could prompt you to look for more affordable offices or ways to cut down on your utility bills. If you’re looking for additional ways to streamline operations and fundraising, take a look at Sumac’s donation management software. Some organizations might also include admin or facilities expenditures in their program budget allocation.

Get smart about budgeting

So whatever project your organization’s board of directors is planning to do, it should have a corresponding project budget. 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 5 Main Benefits of Accounting Services for Nonprofit Organizations aligning limited resources with their mission-driven objectives.

Nonprofit Budget Variance Calculator

• Making an annual budget involves stabilizing an organization’s revenue or income with its expenses and make them work hand in hand.
• When creating a nonprofit organization budget template, consider common budgeting categories your expenses may fall under.
• By allocating funds to specific programs and initiatives, you can track and manage expenses more effectively and ensure that resources are distributed appropriately.
• 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.
• At the end of the budgeting process, you should have a detailed financial plan outlining the organization’s revenues and expenses.
• We strive to provide nonprofit leaders with useful resources, tips, and tools that you can use at your organization.
• It uses its reserve fund to manage unexpected costs during disaster relief efforts.

An accounting software might be a better way to gather expenses than google sheets, so look into tools that make it easier to track your finances! Proper budgeting can help make sure you use resources effectively, prevents overspending and ensures the financial health of your organization. Nonprofits are organizations, associations, cooperatives, or any group of individuals who voluntarily gather to perform either educational, religious, or public services. For a wider selection of budget tracker templates, check out more options here. Relay is an online business banking and money management platform that offers no-fee business checking and savings accounts.

We’ll also discuss framework and tools to set-up, adjust, and analyze your own budget and financial planning, at any level of the organization. Planning is vital to achieving your desired goals in any field of life. In this way, profit or non-profit organizations create annual or monthly budget plans to track expenditure and revenue. It is the best way to organize all the things efficiently like how to get an amount of money to complete a specific program, how much money we need, and where this money will be spent. A nonprofit budget is a planning document used to predict expenses and allocate resources for your organization. It details the costs your organization will incur and the revenue you expect to receive over a set period of time.

• To learn more about taking control of your nonprofit’s finances, watch our free video, Seven Lessons Learned from Nonprofit Leaders.
• You can find a tremendous collection of donation receipt templates that you can use to let the donor know that the donation he/she has made has been received successfully.
• With these templates, you can easily create a detailed budget that includes all the necessary information, from projected income and expenses to funding sources and cost estimates.
• When you are running a fundraising campaign and say that all donations will go directly to program expenses, those are restricted funds that you need to use to support programs.
• Once you enter expenses, you can quickly view your marketing plan’s projected subtotal to date.
• Manage membership, donations, accept payments, host your website, and run events.

Below we discuss the mistakes that companies or organizations make with their solution. In recent years, charitable giving from individuals has skyrocketed to a remarkable $500B per year. But even with these staggering numbers, many nonprofits—particularly small- to mid-sized organizations—are still underfunded.