Budgeting for Nonprofits

That’s not the case for most nonprofits, which have separate arms for raising money and carrying out their missions. Whether you’re a new organization or an established one working to get its finances under better control, there are few more important things to get right than your nonprofit operating budget. The budgeting module integrates seamlessly with other modules in the software, allowing for a holistic approach to budgeting. For instance, budgeting is within grant management to allocate budgets for different grants accurately. Engage board members, managers, staff, and other stakeholders in the budgeting process. Their insights and perspectives can be invaluable in creating a budget that is both realistic and focused on achieving the organization’s goals.

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Partner with Jitasa to create accurate, actionable budgets for your nonprofit. You might not be able to predict what your donors give, but you can control a lot when it comes to spending. 💸 If you’re feeling overwhelmed, try using your goals to prioritize expenses—and remember, you can always increase spending if you’re able to raise more revenue later in the year. If you’re managing a multiple six- or seven-figure budget, asking a financial expert for help is always a good idea. Instead of predicting revenue by individual grants or line items, the cutoff method looks at revenue as a whole. To use this method, simply calculate the projected fundraising revenue by multiplying the estimated total amount with the probability estimate.

Fluctuating Income Sources

And it doesn’t look at how some “Other expenses” might be non-operating expenses. Looking at just total revenue or total expenses can mislead you about how big an organization actually is. By only looking at expenses that are core to the actual daily operations of the nonprofit — and ignoring the rest — you can get a good idea of the https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ actual size of a nonprofit. Google Sheets budgeting templates are the perfect solution for correctly appropriating funds and expenses, resulting in a workable cash flow, so you can continue to focus on your mission.

• Your organization should also determine its policy on reserves, including the ideal long-term level as well as how much and when to contribute or draw them down.
• This budgeting template can also be used as a checklist to ensure that your program has sufficient backing financially to be fruitful.
• These templates serve as a valuable tool for nonprofits seeking to present clear, accurate, and compelling financial projections.
• AAFCPAs recommends a 3-5% surplus operating budget each year, and four to six months of expenses in your operating reserves.
• BoardSource templates have been widely adopted across the nonprofit sector.

Select allocation approach and methods

This is particularly useful for organizations seeking to strengthen board engagement in financial matters. The templates The Key Benefits of Accounting Services for Nonprofit Organizations facilitate informed discussions about resource allocation and financial performance, contributing to a more robust governance structure. This focus on good governance makes them a solid choice for organizations of all sizes, from small community groups to larger, established nonprofits.

Monitor and Manage Cash Flow

Easily manage your money, track expenses, and pave the way for financial success with this intuitive budgeting tool. Apart from fundraising, nonprofits may occasionally feed volunteers or entertain potential donors as part of their development efforts. Nonprofits have to walk a fine line between funding their fundraising and funding their mission efforts—be sure to think through this balance carefully. Finding sponsors for your events can help you earmark a larger portion of your fundraising for your mission program expenses. 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. 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.

• 💸 If you’re feeling overwhelmed, try using your goals to prioritize expenses—and remember, you can always increase spending if you’re able to raise more revenue later in the year.
• For budgeting and allocations we suggest that you separate your activities into distinct programs that will provide meaningful insight into the financial model.
• See how the online fundraising market is changing, what nonprofits are doing, and how you can adapt your strategies for sustainability and growth.
• You can add or remove categories, adjust budget amounts, and update actual expenses as you receive financial statements or make payments.
• Other activities may require periodic or ongoing subsidy from fundraising or other program areas.

Including contracted services in the budget lets you plan and allocate funds for these essential services. This category includes all the costs of hiring and retaining staff—including salaries, payroll taxes, health insurance, retirement contributions, and other benefits. Nonprofit organizations need to budget enough for these expenses to ensure they can attract and retain qualified staff while remaining financially sustainable. Next, turn to the revenue side of your budget to figure out exactly how and when you’ll raise the funds you need to cover all the costs you outlined. Budgeting your revenue based on its source allows you to make the most accurate projections. Plus, if you know exactly where all of your funding comes from, it’s easier to respond to fluctuations in fundraising throughout the year.

• At the end of the fiscal year, assess your organization’s financial performance and the effectiveness of the budgeting process.
• Include key stakeholders, such as board members, staff, and volunteers, in the budgeting process.
• Beyond templates, TechSoup offers valuable resources like video tutorials and step-by-step guides, making budget planning accessible even for those new to the process.
• A budget for non-profit organizations must prioritize reserve building through intentional planning and disciplined execution.
• For this step we recommend that contributed income that is unrestricted or general operating support be assigned to the fundraising category for the analysis.