The Ultimate Guide to Nonprofit Budgets + 3 FREE Templates

In the meantime, schedule a meeting with us and we’ll be in touch soon. Take our 2-minute survey to find out if outsourced accounting and bookkeeping is a good fit for your organization. Looking over your budget with new hard data will allow you to make any tweaks as necessary and head off serious potential problems. A thoughtful budget is not restricted to being an operational tool, it’s a statement of accountability, a roadmap for growth, and a catalyst for change.

A Cost-Saving Solution: Outsourced Accounting Services for Stronger Nonprofit Financial Management

Having your program directors carefully create budgets for each of their programs will knock out a big portion of the data you need to produce an overall nonprofit budget. You can then focus on the rest of the organization’s expenses and funds. The purpose of budgeting for nonprofit organizations is for it to reflect your realistic financial goals and plans for the upcoming year. Note the months and the sources that bring in more revenue and those that offer less funding. By considering these inconsistencies in financial planning, a nonprofit can ensure that it has enough reserves to cover periods of low income.

Review historical financial data.

• Nonprofit investment in digital advertising increased by 28%, with 56% devoted to digital fundraising, 26% to brand awareness, and 15% to lead generation.
• Some of the best options include Google Sheets, Excel, and budgeting software programs like Xero or QuickBooks.
• They start planning with no history to add to the process and the budget is based on future projections rather than historical data.
• Creating a budget for your nonprofit organization is a meticulous process that demands careful planning and execution.

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. We work exclusively with nonprofits, so we understand the unique complexities of your organization’s financial situation and can use our experience to develop tailored solutions for your needs. If you’re ready to dive into creating budgets for your nonprofit, there are various templates available online to help you get started. Every organization’s budget will look slightly different, so make sure you can customize your chosen template to fit your needs and accounting services for nonprofit organizations goals.

• Working on a budget while you’re scrambling won’t produce good result.
• Note the months and the sources that bring in more revenue and those that offer less funding.
• A fresh perspective comes from starting each fiscal year with a new comprehensive budget.
• Tracking this number tells you how much you have with you at any given point.
• If you are comfortable working with numbers and have a good understanding of your organization’s finances, you may find that zero-based budgeting is not as difficult as it initially seems.

Nonprofit Accounting Terms

This can provide a baseline for future budgeting, allowing you to tweak as needed for your goals rather than starting from scratch. Simply collecting this crucial data can go a surprisingly long way toward identifying and solving organizational problems. 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. This means that they have more income than they do expenses, which is a good position financially. Full Suite of Accounting, Payroll and Fund Raising and Fund Accounting applications for nonprofit organizations. Gone are the days where finances need to be tracked on pen and paper!

Utilize historical financial data to make informed projections for your budget. The module allows you to create detailed budgets, defining budget lines for different funds, grants, programs, and projects. A good system will enable the entering and approval of the to be final approved budget and then allow changes to the budget through amendments without changing the original approved budget. Once you have a full picture of the past and present and have reasonably forecast the future, it’s time to actually create your nonprofit budget. Next, your nonprofit’s revenues and expenses should be forecast for the year based on the information that you gathered in the previous step. But budgeting isn’t just a box to check after plugging numbers into a spreadsheet.

Your administrative and fundraising expenses put together make up your nonprofit’s overhead. Contrary to popular belief, overhead isn’t inherently bad—it’s actually necessary to keep your organization running. Create a rough list of these costs and highlight the ones that will apply to the coming fiscal year.

Events and Sponsorships

The mission statement is the guiding light that informs how each dollar should be spent. This should concisely reflect your core values and the change you aim to create. You can also check out customizable templates to fit the unique needs of your nonprofit. Many nonprofit budget templates also come with built-in formulas and functions to automatically calculate percentages, variances, and totals. You might notice a fundraiser underperformed or a new opportunity needs more funding. These insights allow you to adjust quickly, seize opportunities, and manage your finances more effectively.