How https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ to create your superstar team and assign the right Givebutter roles to unlock your team’s full potential—without risking donor data or burnout. While variations in funding may be beyond your control, make sure to monitor your expenses. For example, your programs may have multiple goals, such as improving the quality of aid while also reaching more beneficiaries. However, the budget type you choose will depend on the size of your nonprofit and where you are in your mission’s journey. It is most useful for nonprofits that want to avoid unnecessary expenditures or when they need to adapt to significant changes in their operating environment. This approach ensures that resources are allocated more strategically and efficiently.

Nonprofit Budgeting – A Practical Guide for Nonprofits (+12 Best Practices)

In FY23, WWF increased spending on conservation programs by 16% compared to FY22. Creating a nonprofit budget can feel overwhelming, but breaking it into manageable steps can simplify the process and ensure accuracy. The responsibilites of a nonprofit board include a fiduciary duty to oversee and approve the budget.

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Keep your budget simple and group these personnel expenses together, or split them out by team or activity to give you a more in-depth idea of your staff costs. While program revenue often accounts for the majority of nonprofit income, sales are also really common. Here you can include revenue from memberships, products, and other resources that you sell alongside your programs. These are the services you offer to your audience — for example, animal care, education, childcare, or advice.

Adequate research and realistic cost estimation

The two most common methods for allocating indirect costs to programs are percentage of total direct costs and percentage of FTE. The process begins with the decision of which activities at your organization comprise a program for the purpose of budgets and financial reports. Often, the definition The Key Benefits of Accounting Services for Nonprofit Organizations of programs is evident in how your organization delivers services and functions internally. You may already have clearly defined programs, departments, or projects. Some nonprofits identify every activity or grant as a separate program while others combine many activities under the umbrella term. For budgeting and allocations we suggest that you separate your activities into distinct programs that will provide meaningful insight into the financial model.

• When estimating fundraising income, don’t forget to look at multi-year trends in your organization’s fundraising.
• It demonstrates the organization’s financial health and responsible use of funds, which is essential for maintaining the trust of the board, donors, and other stakeholders.
• However, you can adapt some of our tips to create other types of budgets.
• By linking financial decisions to your mission and goals, you’ll make smarter choices about where to allocate resources.
• Stay up to date on nonprofit news, funding deadlines, job opportunities, and more with the Nonprofit Notes newsletter.

Understanding the true, full cost of delivering various programs and services in the community is a critical piece of the management puzzle. Relay is an online business banking and money management platform that offers no-fee business checking and savings accounts. We’ve already talked about managing your budget with Relay, but we know nonprofit financial management doesn’t stop there. Below is an example of a nonprofit budget to give you an idea of what you need to do.

• This comprehensive approach makes it valuable for both seasoned financial professionals and those new to nonprofit budgeting.
• A nonprofit budget is more than just a collection of numbers; it’s a strategic blueprint that reflects an organization’s priorities, goals, and mission at a foundational level.
• Budgeting for a surplus allows you to support future innovations and invest in your staff.
• This will reduce complexities and will give the reader a fair estimate on the complete picture at a glance.
• Learn about nonprofit accounting processes, regulations, compliance, and best practices.
• 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.
• These areas depend entirely on what kind of activity is going to be held.

If you know there’s likely to be $2,000 left over in your events budget you can think about planning a new fundraiser. If you realize your utility costs have crept up since last year you can negotiate for a better deal. You might be looking at a nonprofit budget example or template thinking, “This is a lot of work.” Sure, it needs some upfront investment of your time, but it’s totally worth it. Contact us if you have any questions about our non-profit templates free resources or NGO templates free downloads and budget for nonprofit template outlined in the sections below. That they just want to know the overall increase in revenue and expenses.

• To keep everything organized, your budget categorizes funds into clear nonprofit budget categories, helping you allocate resources efficiently and maintain financial stability.
• If you are seeing red, maybe it’s time to look at cutting back on some of those expenses.
• Any undertaking has areas that need to be put into account, especially when creating a budget.
• While this is not a strong policy for running a strong nonprofit, it is still widespread.
• Most nonprofit budgets have columns indicating the period covered, budgeted amounts, actual spending, and the percentage difference from the previous period or year.

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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. It contains two budgets for different fiscal periods that can be compared to each other like–for–like as you work your way through to the end of the current fiscal year. Sometimes, the only way to see where your budget is failing is by comparing it to your previous year’s budget to spot any unusual discrepancies. The Multiyear Nonprofit Budget Template by Spreadsheet Daddy is useful for this. Compare how your pledged, requested, and other received amounts are doing in relation to each other to determine in which revenue areas there needs to be a renewed focus. Use this free budget if keeping on top of your deliverables and ensuring the execution thereof is of the utmost importance to your organization.

Free Balance Sheet Template for Non-Profit Organizations

There is a misconception in the nonprofit space that healthy and good nonprofits have low administrative and fundraising costs, and spend the majority of their funding on program costs. As a startup nonprofit, you’re already aware that you have initial expenses before you have your real operational expenses. These startup expenses might include the costs involved in crowdfunding, or what you’re hoping the crowdfunding will cover. Other startup costs might include initial costs for branding and logo, equipment, and first staff member salaries. Remember, the more income your organization gets, the more it gets to spend on making it better. Come up with accurate figures when you are calculating both the expenses and income so that it gives you appropriate results.

Multiyear Nonprofit Budget Template

For example, ASF charges $5 per student per session, so their revenue would be the total number of students served multiplied by $5 each. They also have individual donors and crowdfunding donations that are counted as revenue. Fixed costs will have to be incurred no matter how the flow of income, so mention these must-spend items for everyone’s knowledge. This should present the true ides to the readers about the troubles faced by the Non-Profit in lean periods when they have practically no incoming funds. Things like utility, bills, office supplies, and software subscriptions may seem minor on their own, but when combined they can create significant overhead costs that eat into your budget. By monitoring cash flow closely, your team can anticipate and plan for periods of lower cash availability.