For nonprofits that depend heavily on fundraising, donations, and grants, estimating income accurately is especially important for financial planning. Now that you understand your nonprofit’s financial goals, it’s time to begin drafting your budget. Since you’ve already identified many of your organization’s expenses, start by outlining and categorizing those costs.

Nonprofit Budget Templates

A budget for non-profit organizations needs structure without unnecessary complexity. Well-designed budget templates streamline financial management while ensuring you capture all essential information for decision-making and reporting. Managing a budget for non-profit organizations effectively can make the difference between thriving and barely surviving. Industry research shows that most nonprofit organizations operate with less than six accounting services for nonprofit organizations months of cash reserves, highlighting the critical need for smart financial management.

Identify Expenses

• Capital budgets typically span multiple fiscal years and often require specific fundraising campaigns or financing arrangements.
• Once all expenses have been accounted for, you can then begin to allocate funds to each category.
• The expense budget requires an understanding of your nonprofit’s true needs and strategic direction.
• Most organizations work with two primary budget types, each serving distinct purposes in your financial strategy.
• And if you’re a self-proclaimed “word-person” like me, then the thought of having anything to do with nonprofit organizational budgets might make you turn green with worry.

Again, be careful not to overestimate your revenue just to get a zero bottom line. To earn their place in the budget for another year, costs typically need to be tied to real results. However, it can have a tendency to perpetuate financial problems, unproductive programs, and money waste in an organization. This is because it doesn’t require you to really comb through and evaluate each program and expense individually. Get our FREE GUIDE to nonprofit financial reports, featuring illustrations, annotations, and insights to help you better understand your organization’s finances.

Webinar: Turn Your Business Into a Money-Making Machine

Tracking this number tells you how much you have with you at any given point. Creating the budget is not the responsibility of the finance team only. Since it impacts every department of your nonprofit, consider all stakeholders while creating the budget. Budgeting allows you to identify potential risks and develop effective contingency plans to manage unexpected expenses or revenue shortfalls. Whit Hunter is the co-founder of BetterWorld, the free, easy-to-use online fundraising platform.

Revenue projections are all about estimating the money your nonprofit will bring in. Break down your expected income by source – donations, grants, sponsorships, membership fees, and ticket sales from fundraising events. Well, the thing is like we said before, it’s not like non-profit organizations do not have finances to budget. Their income is basically the donations they get, which are always enough for them.

• Creating a budget for non-profit organizations often involves following historical patterns—budgeting based on last year’s numbers with minor adjustments.
• One of the most valuable results of understanding the true cost of programs is the ability to make wise choices about how to support mission critical work.
• It’s no secret that budgeting guels your nonprofit’s ability to make an impact.
• These are just a few of the most obvious reasons to create a budget for your nonprofit organization.
• In crafting a robust budget for your organization, utilizing budget templates can streamline the process, ensuring accuracy and ease of financial management.

Nonprofit Budget Best Practices for Better Financial Management

• Typically, the cost for getting set up with an accountant is very small.
• Let’s get started by defining what a nonprofit budget is and why it’s important.
• You can also check out customizable templates to fit the unique needs of your nonprofit.
• 💰 This nonprofit budget will help you understand what your organization needs to run smoothly and allocate resources effectively.
• This clarity of purpose informs every category and line item, ensuring funds are allocated efficiently to advance your cause.

Let us not go directly into non-profit budgets and their templates, let me tell you a bit more about what budgeting really is, and why it is so important. Utilize BetterWorld’s platform for nonprofit fundraising solutionsSet up a campaign and start raising money in as little as five minutes. Select and customize the fundraising method best suited for your organization.