Budget for Non-Profit Organizations: Guide for 2025 SBHQ

Boards should analyze variances and consider if there will be any impact on the upcoming budget. This is also a prime opportunity to clarify the annual goals from the strategic plan. Google Sheets is a great tool to use for creating nonprofit budgets due to its ease of use and robust features. Using Google Sheets, you can create financial reports and track expenses and revenue.

Create a Replicable Process

• If you are not in line with your projected budget, look at what changed or what could have been controlled.
• Events often come with their own budget, but you’ll still want to total everything together so you can see a final figure in your main nonprofit budget template.
• Let’s look at some of the best practices for managing your organization’s budget effectively.
• As your nonprofit grows you might find your professional support costs rise, but they’re often well worth investing in (especially when it comes to legal and finance).
• When determining operating expenses, nonprofit professionals should forecast their organization’s resources needed to carry out its activities during a fiscal year.
• The budget should include realistic revenue projections based on historical data and current fundraising capacity.
• For example, if your nonprofit relies heavily on annual fundraising events, consider historical data and any potential shifts in donor behavior.

The budget should also include an analysis of all short-term, medium-term, and long-term https://holycitysinner.com/top-benefits-of-accounting-services-for-nonprofit-organizati/ financial forecasts. Before you can develop an accurate budget, you’ll need to gain a clear understanding of the nonprofit’s financial situation. This will require examining your past budgets, current assets and liabilities, cash flow, and fundraising performance. Ultimately, remember that your budget should categorize revenue by different funding sources and your expenses by program vs. overhead costs.

Budget for Non-Profit Organizations: A Comprehensive Guide

Sage Business Cloud Accounting (formerly Sage One) is an online accounting software that gives you anytime, anywhere access to the most important small business essentials. Investing in some nonprofit budget software will make keeping up with your budget a breeze. Donations, fundraising, grants—each revenue stream has its perks and quirks! Getting an idea of what these streams bring in will help you see how useful each of them are to your organization long-term.

Marketing and fundraising expenses

Whether you’re managing general operations, launching a new program, or amplifying your marketing efforts, a thoughtful budget can be the difference between a successful year and a strained one. 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. Plus, the easy-to-use format makes it simple to track your progress and make adjustments as needed. There are also a number of accounting software programs that can help you create and manage your nonprofit budget. These programs often have templates that you can use, which can make the process of creating a budget much easier. If you’re not sure how to create a nonprofit budget, consider hiring an accountant or accounting service.

• One way that board and staff plan for income and expenses in the future is by creating a budget.
• A well-crafted budget not only keeps an organization on track but also demonstrates to donors and funders that funds are being used responsibly.
• In reality, the meaning of “nonprofit” is simply that your organization has to reinvest all of its funding into its mission rather than paying investors or shareholders.
• Good communication between the program, finance, and development departments and the board is key to monitoring the budget during the year.
• When we discuss budgeting here, we are typically referring to an operating budget, the budget of income and expenses to operate the nonprofit.
• This ensures a comprehensive perspective and fosters shared accountability in keeping with projections.

There should be enough lines in your budget to provide for a comprehensive understanding of the financial situation. However, the budget should be high-level enough so as to not be cluttered and overwhelming. While there will inevitably be some assumptions in your budget, try to work with real numbers as much as possible. Use last year’s numbers as a starting place and include any quotes from vendors or partners. Articulate the main purpose of your budget and think about a structure that will best support that purpose. 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.

Staff salaries and benefits

Some nonprofits also have earned revenue and an analogous process will work for that portion of the revenue side. Use confidence-level percentages as shown above to budget for the renewal of new versus long-term paying customers and clients. And if you are lucky enough to end up with a surplus, you may have an opportunity to use these funds to invest in land or office space, hire additional employees or update your technology. Or you can decide to increase the reach of your organization with more international programs or run more campaigns in order to attract more volunteers to your cause. No matter what, it’s always nice to see a surplus and think about how to use it most effectively to build your organization even stronger.

• Some confusion occurs when differentiating short-term and long-term objectives.
• Just be prepared with our information above and you’re charity will be in a much better position to grw and thrive.
• For instance, if your nonprofit hosts an event, Paybee automatically tracks ticket sales and updates your nonprofit budget to reflect any income you derive from your activity.
• With this information in hand, you will create a budget for the following year that will allow you to continue your operations as you are now.
• 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.
• With these features in mind, let’s dive deeper into the two sides of your nonprofit’s operating budget.
• Those details will come in super handy when you start projecting expenses for next year.

Hire An Accountant or Use Accounting Software to Help

Seeing as appeals are usually for a specific project, this is an easy way to help you track those funds so they Accounting Services for Nonprofits: Benefits and How to Choose the Right Provider don’t get lost in your general revenue pot. Very soon, you’ll have a nonprofit budget that serves you well and helps you manage the finances. Unfortunately, it often excludes people outside an organization’s finance team. Similarly, the budget is often too focused on the present knowns without regard for the unknowns or the future. As previously mentioned, the contingency line is about preparing for the unexpected within the budget year. In contrast, the budget-to-surplus practice is about looking to the future to ensure your organization’s long-term sustainability.