How to Create a Nonprofit Operating Budget + Free Template

We’ve already talked about managing your budget with Relay, but we know nonprofit financial management doesn’t stop there. Knowing what you want to accomplish and how much money is available, you can now create your expense budget. Before you can develop an accurate budget, you’ll need to gain a clear understanding of the nonprofit’s financial situation.

Know the Nitty-Gritty of Getting a Business Credit Card

In this article you will learn 7 nonprofit templates to help you streamline and simplify your budget-creation process. Use a free template to get you started and once you’ve added any unique requirements to it, this can be reused for subsequent budgeting sessions. It also helps to use a standard format for budgets as you can compare them and track growth and changes over the years. You’ll need a program budget every year, so get your docs in order for the years ahead and plan a clear budgeting process. 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. Plus, with a budget plan you’ll be better able to manage operations with limited funds.

Align nonprofit budget planning with your goals

This is another reason why it’s helpful to have a member of the board be part of the budgeting team. If we’ve learned anything from the COVID-19 pandemic, it’s that the unexpected can happen. Make sure you’ve built enough financial cushion into your annual budget to handle surprises. Make sure everyone on the team understands and buys into both your programmatic and financial goals and that those goals are accounting services for nonprofit organizations aligned. Your budget team should include your chief financial officer, your executive director, and your program heads to provide input. You may also wish to include your board’s treasurer who can provide additional valuable insight.

My Board View

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. This is super easy to do using a tool like Excel or Sheets, where you can use the “SUM” formula to quickly add up the totals in your columns.

• All resources are available for immediate download after you sign up for a Free Tools account in the Case Management Hub platform.
• It’s also quicker to implement and help senior leaders stay on top of the organization’s resource allocation.
• Running a nonprofit is hard work, and an essential part of that is budgeting.
• The above Template example is an example of a detailed organizational event budget plan that includes everything in terms of expenses and granted amounts, auction, entertainment, etc.
• Budgeting for a surplus allows you to support future innovations and invest in your staff.

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 https://holycitysinner.com/top-benefits-of-accounting-services-for-nonprofit-organizati/ allocating time based on general estimates or gut feeling is often inaccurate.

Gather historical financial data, project future revenue sources, and estimate program costs. Use a program-based approach to understand true costs, include adequate overhead allocation, and build in reserves. Involve key stakeholders in the planning process and create regular review cycles for monitoring and adjustments. This free operating budget template can simplify the budgeting process. It can help you organize revenue and expenses, track performance, and make data-driven decisions to support your mission and your organization’s financial sustainability. This process is most valuable when a nonprofit can understand both the full cost of delivering programs and the amount and type of income that relates to those programs.

BUDGETING FOR NONPROFITS – MADE SIMPLE

• While variations in funding may be beyond your control, make sure to monitor your expenses.
• This helps raise awareness for their mission while ensuring sustainability and success in achieving their goals.
• Creating lasting relationships with your suppliers and partners will save you time, energy, and even money!
• You might not be able to predict what your donors give, but you can control a lot when it comes to spending.
• WildApricot is an affordable cloud-based software for small associations, non-profits, state and local chapter organizations.

Operating budgets reflects the organization’s planned financial activities for the year ahead, showing how much revenue it expects from which sources and how much it will spend on operations. It’s a key tool in effectively and efficiently achieving the organization’s stated purpose, and should always align with an organization’s strategic plan. The operating budget must be centered around the primary goals and objectives of the organization. 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.

Building a budget can be complex, but by following a sequential plan, you’ll find creating a nonprofit budget isn’t as daunting as you might have thought. When seeking funding for a program or project, you’ll need to separate out direct expenses (expenses that are 100% related to project/program delivery) and indirect expenses. You’ll want to include campaign expenses, such as consulting fees, travel, printing, web upgrades, events, and donor recognition in the campaign budget. If your nonprofit operates a handful of programs, you definitely need some program budgets. An organizational budget provides an important roadmap for each fiscal year and it acts as a touchstone on which to monitor an organization’s fiscal health.