Budgeting for Nonprofits

This is the budget of revenues received and expenses paid, broken down monthly to ensure cash will be there when needed. Before starting with what is, essentially, a future-oriented process – clarify the present context. Evaluate current financial health by analyzing the current year-end forecast, current budget variances, and balance sheet strength. Then, take some time to reflect on and learn from programmatic and financial successes and failures. Below is an example of a nonprofit budget to give you an idea of what you need to do. This budget includes expected income, expenses, and funding for a small nonprofit organization.

Get started with a free nonprofit budget template

By organizing your budget and allocations this way, you’re also setting up the accounting system to track and report the three functional expense categories required on audits and the IRS Form 990. Nonprofit organizations have events, programs, activities, and operating processes that need to be sustained. Because of this, donations, grants, and fundraising revenue expenses need to be allocated properly or put into a line item. Such a document is highly applicable for any monthly, quarterly, and annual proposed development. Moreover, it can be used for both startup and long-established nonprofit organizations.

Accounting Software

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. Develop, analyze and apply your organization’s budgets with expert help from the nonprofit financial professionals at https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ Jitasa. With these features in mind, let’s dive deeper into the two sides of your nonprofit’s operating budget.

• FDIC insurance is available for funds on deposit through Thread Bank, Member FDIC.
• With each reporting period, the organization compares actual performance against its plan.
• Needless to say, such a document is very important for this sector of organizations.
• Mark the events in everyone’s calendars, so that it becomes easier to repeat the process each year.
• To secure the finances of your nonprofit institution’s undertakings, we highly recommend you check out our nonprofit budget examples!

Step 3: Set department budgets

• Even if your nonprofit is just getting started, it’s not too soon to get into Quickbooks or another accounting software that can help you track and analyze all your income and spending.
• The ultimate guide to selecting the best accounting and financial management software for your nonprofit.
• Those details will come in super handy when you start projecting expenses for next year.
• Regular nonprofit budget reviews help identify trends, catch potential problems early, and adapt to changing circumstances.
• Since your nonprofit is new, you don’t have historical numbers to look at and base your projections on.

Trust me on this one — the next time you’re presenting a budget to your board, keep referring back to goals of your organization and I bet you will get exponentially fewer weedy questions. Full Suite of Accounting, Payroll and Fund Raising and Fund Accounting applications for nonprofit organizations. 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. You can keep all the information in one excel sheet, or break it up into different pages. But make sure you delete any line items that don’t apply to your work and add anything that’s missing.

Proposed Nonprofit Grant Budget Template

Finally, update your template periodically to reflect changing organizational needs and industry best practices. A well-designed template transforms nonprofit budgeting from a yearly burden into an ongoing strategic tool. Customize your template based on The Key Benefits of Accounting Services for Nonprofit Organizations your organization’s specific needs and reporting requirements. Consider board expectations, grant requirements, and program manager input. Also, creating an effective program-based budget requires clear definitions, consistent cost allocation methods, and regular impact assessment. Involve stakeholders in the process, maintain flexible adjustment processes, and establish strong documentation standards.

Distribute the Available Funds

• Any undertaking has areas that need to be put into account, especially when creating a budget.
• A budget for non-profit organizations becomes more effective when broken down by program expenses.
• Recurring costs, such as inventory purchases, must be covered before indirect ones, such as office supplies, salaries of employees, and rent.
• Here are 5 steps that will help you create your first budget for your new nonprofit.

Even if your nonprofit is just getting started, it’s not too soon to get into Quickbooks or another accounting software that can help you track and analyze all your income and spending. Here’s a list from Forbes to get you started on your research into which tool will work for you. Carefully track your numbers this year, and next year’s budget will be easier to create.

Even small and medium companies need a budget to keep their income and expenses on the check. You can check budget in Google Docs if you need to make a budget in the sample form of a document. The above non-profit budget template will be of great help to you if you plan on creating the right budget for your organization. When creating a nonprofit organization budget template, consider common budgeting categories your expenses may fall under. This gives you a greater understanding of the different business aspects of a nonprofit and provides a framework for considering how to most effectively distribute your funds.