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. 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. With this approach, you determine the anticipated funding from each fundraising source by multiplying the expected amount with the corresponding probability percentage.
Advantages of Having a Budget Plan
- Effortlessly manage your budget using our free Budget Spreadsheet Google Sheets and Excel template, designed to help you track expenses, set savings goals, and achieve financial success.
- If you don’t have a fundraising history to work from, you can use a fundraising goal as a starting point.
- List all the ways money will come in – donations, grants, events, corporate sponsorships, and more.
- You might realize you could switch to an online program, or swap your thank you letters for personalized thank you videos instead.
Here’s a very basic example—but remember that your organization’s budget might be more complicated than this (or maybe even simpler!). Are you looking to expand a program, hire additional staff, or purchase new technology? Creating a nonprofit budget can feel overwhelming, but breaking it into manageable steps can simplify the process and ensure accuracy. For more on start-up and small business budget templates, see Free Startup Budget Templates and Free Small Business Budget Templates. If you don’t have a fundraising history to work from, you can use a fundraising goal as a starting point.
Tips to create a successful budget
Ideally, salary allocations will be based on regular, reliable tracking of time. The data is already available for nonprofits that track time for grants and contracts. If that has not been your practice we urge you to gather some accurate information by completing a timekeeping report or adding time reporting to payroll or database records. We know from experience that allocating time based on general estimates or gut feeling is often inaccurate. The goal of program-based budgets and allocations is to gain a solid understanding of the true costs, and staff cost is too important to leave to guesswork.
Estimate your nonprofit’s income 💸
- 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.
- By comparing actual progress against your budget, you can assess your programs, optimize operations, and make better decisions.
- By considering these inconsistencies in financial planning, a nonprofit can ensure that it has enough reserves to cover periods of low income.
- The budget also plays a key role in forcing organizations to prioritize their activities so as to determine those that are most critical for fulfilling their mission.
- Setting out a process will help you develop more accurate budgets that reflect the priorities of your organization and keep you on track.
- Nonprofits can create a budget for a fiscal year, a fundraising event, or their next capital campaign that can span over the years.
Plus, the easy-to-use format makes it simple to track your progress and make adjustments as needed. This template provides an accurate picture of your nonprofit’s budgeted operating costs and all-around fiscal health. Excel is another popular tool for creating nonprofit budgets due to its ease of use and plethora of useful features. Using Excel, you can create tables that display the organization’s finances over time. To ensure that all expenses are accounted for, it is helpful to create a budget template that can be used on an annual or monthly basis. This template should include line items for all of the above expense categories, as well as others that may be specific to your organization.
Filling in a clear, simple nonprofit program budget template will give you all the details you need to make strategic decisions. Plus, you’ll feel good knowing everything’s written down and no longer floating around in your head. Now that you know what should be included in your nonprofit budget, it’s time to start creating one.
FREE Nonprofit Program Budget s to Download
Review your spending regularly to ensure it aligns with your strategic goals and keeps your nonprofit financially healthy. To help you avoid these pitfalls, here are some essential budgeting best practices to keep your nonprofit financially stable and mission-focused. 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. Zero-based budgeting requires your financial planners to evaluate each expense based on current needs, starting from scratch accounting services for nonprofit organizations for each new budgeting period. This free sample donation letter template for nonprofits comes in MS Word format, ready for you to quickly edit with your details.
Nonprofit Financial + Budgeting Software to Consider
By following these five steps, you can create a nonprofit operating budget that sets you up for financial stability and growth. Learn the 12 key metrics you need to monitor the financial health of nonprofit organizations. Driver-based budgeting helps your nonprofit align its financial https://nyweekly.com/business/accounting-services-for-nonprofits-benefits-and-how-to-choose-the-right-provider/ planning with operational activities, making adjusting to changes and improving decision-making easier. 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. At the same time, balancing mission-driven initiatives with responsible financial management is key to ensuring your nonprofit’s long-term sustainability. 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.