Ideal Nonprofit Budget: Example and Tips Sage Advice US

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. A capital budget covers one-time expenses that will take years to fully fund, like major construction projects. Seeing these things side by side gives you the tools to decide how you can best use your resources. Your nonprofit budget is meant to be a flexible document that changes as your circumstances do. After all, sometimes you have a boost in revenue, or get hit with a pesky unexpected expense.

Personnel Costs

• That way, you will know exactly what it is that you have to pay off and so that you can set aside enough income for them.
• The above simple template will help you produce your finances for a financial year.
• Make this part of your nonprofit’s culture so it happens systematically every year.
• 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.
• In this article, we will discuss what should be included in a nonprofit budget, how to create one, and provide a template and example budget to help guide you through the process.

There’s no “right” approach to organizational budgeting—you must find the one that works best for you. Otherwise, you won’t be able to accurately compare budgets from period to period. Use known values to budget for other related estimates, such as personnel costs. Create a detailed personnel tab by listing each employee’s base salary for the year and calculating bonuses, benefits and taxes as a percentage of the known salary. A standard rule of thumb is to include a 3-5% bonus and benefits/tax costs at a rate of 25-30% of each employee’s salary.

Develop Income Projections

Regularly reviewing the budget will help you identify potential issues early and allow for more effective decision-making. Compile your income projections, expense estimates, and resource allocations into a draft budget. Use a spreadsheet or budgeting software to organize the information, making it easier to review and adjust as needed. Categorize your organization’s expenses into fixed and variable costs. Fixed costs are expenses that remain constant, such as rent or salaries, while variable costs fluctuate based on activity levels or other factors, such as utilities or event expenses.

Monitor cash flow regularly

It should include some typical sources of revenue and expenses, which saves you time on listing everything out. If any of the sources don’t apply to you, you can just delete them—likewise, you can add anything that’s missing. 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.

• Do you have a story to share or tips for developing a nonprofit budget?
• In this article, we’ll discuss what is a nonprofit budget, its importance, 12 best practices, a free template, and more.
• To smartly manage the budget for a specific sample program, the above template will be of great help.
• A nonprofit budget template is an essential tool to control the financial resources of a nonprofit organization.
• Our team of experts offers free consultations and resources to help your organization create a successful marketing plan.
• In this sense it is the primary source for making informed decisions, assessing funding needs, and communicating financial expectations to your board and stakeholders.

Create a list of “nice to haves” you can add into your budget if you have projected funds left over after your necessary expenses are covered. Learn the essentials of developing a nonprofit budget—tips, best practices, and free resources to help you build a strong, credible budget or refine your current one. Create a rough list of these costs and highlight the ones that will apply to the coming fiscal year. Then, add them together with your existing expenses, such as rent, bills, and salaries for your current staff members. Use this estimate to set an overall goal of how much revenue you’ll need to bring in to cover all of your costs for the year. Be sure to include these expenses if the organization needs to rent or maintain a physical location for its operations.

Professional Services

Finance leads should work with team members to project monthly cash-ins and outs to ensure there is enough cash on-hand throughout the year. When it comes to “money,” many nonprofit leaders focus their efforts on fundraising, but financial planning, modeling, and monitoring is just as important to financial health. From daily operational costs to monthly donations, there is a wide range of elements that should be included in your nonprofit’s budget. Financial planning is vital to an organization’s success and sustainability.

How to create a nonprofit budget template

We strive to provide nonprofit leaders with useful resources, tips, and tools that you can use at your organization. We’d love https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ to hear your feedback about this content and anything else you would like to see more of from NFF. So, there you have it — 10 steps to creating your annual budget as a team.

How to Calculate a Nonprofit Operating Budget

• At least once a month, you should compare your forecast to your budget to ensure you’re on track to fulfill your mission.
• It is good practice to periodically review the budget as well as compare it to the actual cash flow and expenses, to determine whether they are playing out as expected during the course of the year.
• When you work with a Google Ad Grant professional like Getting Attention to manage your Google Ad Grant, you’ll be able to develop a strong digital marketing strategy that works for your budget.
• In doing so, you can position your organization for success in your next budget year and beyond.
• It also means any extra funding you have at the end of the year can be put into a long-term savings account for your nonprofit.

Before you begin budgeting, establish your organization’s goals and objectives for the upcoming fiscal year. Clearly defining these will help you allocate resources effectively and guide decision-making throughout the budgeting process. A nonprofit budget is a financial document that provides a detailed view of how the organization plans to spend its money, and what it aims to achieve over a 12-month period. There are as many forms of nonprofit budgets as there are forms of organizations. While no two nonprofits are exactly alike, there are some best practices that all organizations should use when building their annual operating budgets. Below is an example of a nonprofit budget to give you an idea of what you need to do.

What Should Be Included in a Nonprofit Budget?

If you’re ready to dive into creating budgets for your nonprofit, there are various templates available online to accounting services for nonprofit organizations 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 goals. Your nonprofit’s budget should be organized to align with other key financial resources, including your internal records, financial statements, and tax returns. Therefore, it’s most effective to categorize the revenue side by source.

Categorised in: Bookkeeping

This post was written by vladeta