That’s why we’ve put together the ultimate guide to making your own nonprofit program budget — complete with THREE free nonprofit budget templates. Track your nonprofit’s project-specific budget with this basic template. List income sources and figures in monthly columns to determine month-by-month total income. Enter project expenses in the same month-by-month columns to compare total expenses to total revenue. If you’re not sure how to create a nonprofit budget, consider hiring an accountant or accounting service.
- You’ll be able to make adjustments earlier, like reallocating funds or planning to raise more revenue.
- There are different types of budgets intended for specific purposes, departments, or focused periods.
- In this step you apply the allocation methods described above to the various direct costs that are shared between programs, which may include administration and fundraising cost centers.
- Regularly compare actual expenditures against the prepared budget to ensure your nonprofit is on track.
- With a proper budget, your nonprofit can stay focused and organized while remaining accountable to the stakeholders who make your work possible.
- Approval of the annual budget is one of the fundamental building blocks of sound financial management.
Expected Expenses
His passion lies in empowering these entities to optimize their operations through the strategic integration of technology, particularly in the realms of https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ Governance, Risk, and Compliance (GRC). Finally, the board or budget committee should be ready to present the annual budget to any necessary committees and the board for final approval. This approach gives you a realistic picture of your expected income, helping you plan more accurately. Get the input of your volunteer head, executive director, fundraising leader, and other department heads into the budgeting creation.
Additional Types of Nonprofit Budgets
You will also learn how non-profit organizations are using different budgeting techniques to handle operating challenges. A common budgeting myth is being a “nonprofit” means your organization can’t make a profit. In reality, your goal should be to budget The Key Benefits of Accounting Services for Nonprofit Organizations for a revenue surplus—where your total revenue outweighs your total expenses.
Assessing Board Performance: Best Practices for Nonprofits
There are two primary ways that a nonprofit organization can choose to budget its finances – historical budgeting and zero-based budgeting. Consider staff costs, professional services, technology investments, insurance, and office expenses. Compare this against your predictable expenses like payroll, rent, and utilities, as well as variable costs tied to program delivery and special events. Also, creating an effective program-based budget requires clear definitions, consistent cost allocation methods, and regular impact assessment.
Free Resources
- Calculating and analyzing the true cost of programs and activities can be completed as a one-time project or implemented as an ongoing management practice, as we recommend.
- Keep financial data in a central platform like a nonprofit accounting system to ensure easy access for your team.
- Once all expenses have been accounted for, you can then begin to allocate funds to each category.
- It also breaks down the nonprofit’s operating expenses and overall costs.
- Checking in with multiple departments will help you better understand the big picture.
- Explore a range of nonprofit budget templates available for download to enhance your financial planning and ensure your organization’s sustainability.
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. The Vermont Community Foundation offers a sample organizational budget template designed to assist nonprofits in planning their annual financial activities. This sample budget outlines various categories for both income and expenses, providing a clear framework for organizations to project their yearly financial operations.
