Making a budget is a whole lot easier when you’re not relying on guesswork. Budget states what a company is expecting in a short period, while forecast projects the financial fluctuations based on the current trends. Keep in mind that there’s no one-size-fits-all budget for grant proposals.

Conclusion: Nonprofit Budgeting Is a Process

The operating budget must be agreed upon by the board similar to how a grant budget, as shown on the grant budget samples, is approved before given to the potential grantors. Create a detailed list of the income and expenses for your new nonprofit business, which often covers the period up to beginning operations and a small amount of time after operations have begun. Startups will be easier to run if you have the right printable plan set in place to run it perfectly. Once you achieve your set of goals for the company, you can see its growth in the market easily. There are many resources to assist you with creating your own budget after you’ve considered all of the direct and indirect costs of your project.

Budgeting: A Guide for Small Nonprofit Organizations

The best practices we shared in this guide are the fundamentals of sound budgeting for nonprofit organizations. Similarly, the cost of fundraising is valuable to programs and the final step is to allocate fundraising expenses to each. The most common basis for allocating fundraising costs is based on percentage of total support received by each program. This method matches the percentage of fundraising expense charged to a program to the percentage of contributed income that program receives. We leave this step until last because some funders, including many government funders, will not allow fundraising expenses to be charged to their grants or contracts. Regardless of whether a funder will pay for fundraising expense, it remains part of the total cost of running each program and we need this information to be truly informed.

Templates

If the organization has never allocated costs or overhead before, spend some time discussing the concepts and practices described in this guide. 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. For most nonprofits, some programs may be financially self-sustaining or even generate a surplus. Other activities may require periodic or ongoing subsidy from fundraising or other program areas. Deciding whether and how to support these services is a central strategic decision for nonprofits.

The use of budgets aids the stakeholders of a non-profit organization, like the management and the board of directors, in the creation of the future of the non-profit. At the same time, it assesses the current financial condition of the organization. For a wider selection of non profit budget templates, check out more options here. Looking to create a well-crafted budget for your nonprofit organization? Look no further than these nonprofit budget templates, which are designed to help you plan and track your expenses effectively.

• For example, Doctors Without Borders allocates a significant portion of its budget (over 80%) to direct program expenses, ensuring most donations fund medical care in crisis zones.
• Grassroots nonprofits, by stark contrast,  often scrape by to fit within their annual nonprofit budget plan.
• The summary table at the very bottom will help you see how you’re tracking as far as year-to-date, and year-to-date budget totals go.
• Donors and stakeholders demand transparency in how their contributions are utilized.

Work to develop lasting relationships with any vendors, suppliers and partners as this will save you time, energy, and even money! Setting costs with them early on will make budgeting easier and help you avoid guesswork. It’s important to focus on annual goals, but make sure you also look beyond what you want to achieve this year, and include line items in your budget for long-term goals. Before you look at program expenses, set a meeting with executive directors to get clear on what you need to focus on so you can budget accordingly. It demonstrates your ability to responsibly manage financial resources and provides a roadmap for activities in the upcoming year.

• Below, we explore the major challenges of a nonprofit budget proposal and provide real-world examples of how organizations have successfully addressed them.
• Finally, your budget needs to establish a clear connection between the numbers and your goals.
• This template provides an accurate picture of your nonprofit’s budgeted operating costs and all-around fiscal health.
• 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.
• A well-crafted nonprofit budget ensures financial sustainability, supports strategic decision-making, and fosters transparency with donors, stakeholders, and the communities you serve.

These budgets can be used again and again, for a vast range https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ of projects. Using the financial plan and the template, start allocating the budget. Be sure that you will put the exact amount on each items so there will be no discrepancies. You can also use a monthly budget so that the spreadsheet will become more visible. In general, the steps to creating a grant budget, include identifying all your potential expenses, delineating between direct and indirect costs, and giving yourself some buffer for unexpected costs. Because of this kind of goal, few people would present themselves as donors and offer support, which is mostly in the form of money.

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• Direct Relief is a great example of how contingency funds can help tackle unforeseen emergencies.
• For this reason we wait until after all the direct allocations are completed before we turn to allocating the indirect costs.
• Download it by clicking on the green Download button below the thumbnail of the template.
• The best way to ensure your budget is accurate and actionable is to have expert nonprofit financial professionals create it for you—like our team at Jitasa.
• Proper budgeting can help make sure you use resources effectively, prevents overspending and ensures the financial health of your organization.
• It outlines expected income and planned expenses for a specific period, typically a fiscal year, ensuring that resources are allocated efficiently and transparently.

Improve your financial stability with this handy guide to nonprofit accounting and bookkeeping, including the basics of seven key money management practices. To clear up any The Key Benefits of Accounting Services for Nonprofit Organizations confusion surrounding these resources, we’ll begin by answering some common questions about nonprofit budgets. You can keep all the information in one excel sheet, or break it up into different pages.

What is a Nonprofit Budget Template?

For example, your goal for 2025 can be to increase fundraising revenue by 20% to support a new educational outreach program. Good communication between the program, finance, and development departments and the board is key to monitoring the budget during the year. These projects probably won’t be delivered every year, so separating your operational budget from your capital budget is the best way to go forward. Revenue can be one of the more difficult parts of developing a budget – simply because it’s harder to forecast than expenses. An inclusive budgeting process can certainly be challenging and messy and with a great deal of debate. However, this approach to budgeting presents a great opportunity to bring in and unite various perspectives.