Identify the key areas that support your organization’s objectives, such as program delivery, fundraising, staff development, or community outreach. Evaluate the importance of each area and the potential impact on your mission. Divide resources and funds accordingly, prioritizing activities that directly contribute to your goals.
- Load up your preferred spreadsheet software and create a blank sheet ready to create a master budget worksheet.
- Download this CSV template to use in Excel, Google Sheets, or your preferred spreadsheet software.
- If there is a significant net deficit or surplus in the day-to-day running of your business, you are sure to know about it with this simplistic yet spot-on free budgeting spreadsheet.
- It leads to more effective financial management and decision-making processes.
- We kept the line items generic and focused on items most nonprofits will likely encounter, but we recommend checking with your accountant and personalizing this template to fit your needs.
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Download this budget template to kick off your nonprofit budgeting the right way!
- Administration and fundraising may have direct expenses assigned to them as well.
- Nonprofit organizations have events, programs, activities, and operating processes that need to be sustained.
- With nonprofit budgeting or accounting software solutions, you can streamline the financial planning for your nonprofit.
- Fundraising events can be a fun and effective way to raise revenue for nonprofits.
Use the same categories in your budget to easily generate financial reports to funders and others. Monitoring your revenue and expenses should ideally become a part of your nonprofit’s organizational culture, something everyone is aware of and contributes to. Mark the events in everyone’s calendars, so that it becomes easier to repeat the process each year. After gathering all the necessary sources of your numbers and figures, pick out the items that are relevant to your nonprofit activity.
Rely on nonprofit accounting software
Program expenses include any costs incurred in service of your mission. Whether you’re providing housing, healthcare, or meals for your community, these expenses are crucial to achieving your nonprofit’s goals. One key reason many nonprofits struggle when it comes to accounting and 5 Main Benefits of Accounting Services for Nonprofit Organizations finances is their failure to treat their organization as a business. While nonprofits and small businesses differ in many ways, managing your nonprofit’s finances similarly to how you’d run a business is essential for success. A nonprofit budget should ideally have two sections – one for funding and one for expenses (including overhead and operating expenses). Columns for projected expenses or revenue, what was actually received or spent, and how these differ from one another are also a must.
- These insights allow you to adjust quickly, seize opportunities, and manage your finances more effectively.
- Seeing as appeals are usually for a specific project, this is an easy way to help you track those funds so they don’t get lost in your general revenue pot.
- Note that this budget template is perfect for a general operating budget, but you may need to make significant changes for a program or project-specific budget.
- Like with your revenue, we recommend splitting them into categories within your nonprofit budget template.
#3 Nonprofit Grant Proposal Budget Template
These are the services you offer to your audience — for example, animal care, education, childcare, or advice. You could keep this income as one line item on your budget, or split it so you can get a quick view of income per program. Having a budget will also make you look super organized and efficient.
The capital budget may include projects which will have ongoing effects on operations. The capital budget can also be used for construction and other big, one-time spending projects that often take more than a fiscal year to pay for. Capital fundraising via capital campaigns can help you secure the funds for these projects. Once everything’s set, finalize your nonprofit budget by appropriately distributing your organization’s current funds to your predicted expense items.
In order to help you out with that, here are the https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ steps that will allow you to properly create your very own nonprofit budget. In incurring fixed expenses, you can reduce your overall costs, making it less wasteful. Determine your fixed costs, regardless of the number of financial responsibilities you have, such as rent, employee salaries, insurance, and materials.
The Ultimate List: Tools Every Small Nonprofit Needs to Be More Productive
Be realistic about what you can successfully operate the first year, especially if you will need to raise the money for the program(s) (fundraising can be a bit slow at first). When you’re just getting started, it’s critical that one of your first steps is to create your nonprofit’s first budget to help you manage both your organization and your finances as it grows. To help you to do that, I have developed an easy-to-use nonprofit operating budget template. You’ll find a bunch of them on the internet but they are just that — templates. What I’m going to offer you is a basic template and also some advice on how to best use it to tell the story behind the numbers.
Your annual unrestricted surplus should be sufficient to meet debt obligations, fund depreciation, and add to operating reserves. AAFCPAs recommends a 3-5% surplus operating budget each year, and four to six months of expenses in your operating reserves. Many nonprofits seem to not only operate on shoestring budgets but are also proud of it. Some nonprofit leaders may even be reluctant to show a surplus in their books, fearing the perception that they are not putting their resources to good use. When budgeting, nonprofits sometimes make the mistake of forgetting to account for in-kind donations or volunteer hours. If you have a special project in mind, create a separate budget for it.
Create a Replicable Process
A nonprofit operating budget template can help you make sure you’ve hit all the bases. Including contracted services in the budget lets you plan and allocate funds for these essential services. But if you’ve never created a budget or thoroughly reviewed your finances, it can feel overwhelming. To keep your nonprofit on track, we’ll walk you through each line item you might need to include in your nonprofit budget template and show you how to create one tailored to your needs. Note that some revenue sources bridge multiple categories and can be organized in different ways.