The final analysis will clearly show what program areas require these sources of support and enable leaders to make the all-important decision about how to best attract and direct flexible funds. In this step you apply the allocation methods described above to the various direct costs that are shared between programs, which may include administration and fundraising cost centers. For the earlier office supply example, you would add up how many FTEs work in each program area and calculate a formula as a percent of the total number of staff. These calculations may be automated through the accounting system or completed manually.
- It is better to mention totals on a monthly basis to give a more accurate picture to the reader.
- When it comes to the budget of a non-profit organization, the Trusts play an important role, as often they are the main sources of income for them.
- Do what you can to structure your budgets similarly over the years—this will make it easier to compare them side by side as you track your growth.
- Full Suite of Accounting, Payroll and Fund Raising and Fund Accounting applications for nonprofit organizations.
Do nonprofit budgets have to break even?
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. Every nonprofit has operating expenses, program expenses, and fundraising expenses of some kind. Like with your revenue, we recommend splitting them into categories within your nonprofit budget template.
Identify All of your Expenses (that you can!)
In this way, profit or non-profit organizations create annual or monthly budget plans to track expenditure and revenue. It is the best way to organize all the things efficiently like how to get an amount of money to complete a specific program, how much money we need, and where this money will be spent. See the reviews below of some of the more popular Google Sheets nonprofit budget templates that are available at no cost to your organization. During your last budget review meeting of each quarter, review your financial data more closely and take more time to visualize the current and future state of your organization’s activities. You also want to pay close attention to different budgets within your nonprofit’s plan. To help you through the budgeting process we’ll walk you through every line item you might need to include and show you how to create your own nonprofit organization budget template.
How to Create a Nonprofit Budget 9+ Templates to Download
If your nonprofit has the financial flexibility to budget for a revenue surplus, do so! When your predicted income exceeds your projected expenses, you’ll be more prepared to course correct if you incur unexpected costs or some revenue sources fall short of your goals. Plus, you can use any funding you don’t spend to build your organization’s reserve funds, which contribute to long-term sustainability.
So it has clear income and expense segments with the listed variables for the budgeted column and the year-to-date column. Your nonprofit organization may have arranged to accumulate a lot of debt for it to keep working. So the budget document has to have the names of all the different origins of debt. This way, you will know how much you have to pay off to debtors, and you can set that money aside. When you are going to mention your expenses, it is pretty obvious that you also mention your income and the sources of income.
Overview of the Process
When your organization is not in line with the budget, you should look at “why,” and what factors you can control or change. This is where the budget becomes an effective management and operations tool for your organization. This allows for a better overview, more speedy addressing of any potential issues, more nimble management of the staff and volunteers, and a more informed everyday decision-making process.
Involve your Board, Executive directors, staff members, and even volunteers during the budgeting process. This will not only help create a more accurate and comprehensive budget but also ensures buy-in from key stakeholders. If you don’t know what your goals are, your budget accounting services for nonprofit organizations plan will fail to reflect them, and you might end up overspending on programs that don’t further the core purpose of your mission. This guide and accompanying spreadsheet template break down the process of understanding true program costs, either through budgeting or financial reports, into several stages.
