5 Steps to a Successful Nonprofit Budget Template

We interviewed over a dozen grant consultants and professionals to understand what grant budgets need to pass the sniff test with funders and convince them to open up checkbooks. It doesn’t matter if you’re applying for a government, corporation, or foundation grant, a well-crafted budget will make or break your proposal. Many software providers offer a free trial or demo so you can test out the features and see if it’s a good fit for your organization.

How Do You Categorize Nonprofit Expenses?

A popular methodology for this kind of planning is the S.M.A.R.T model, originally formulated for determining management goals. Clarify who will oversee different aspects of the budget as your project takes shape and outline the processes that will guide them. This budget allocates funds for unplanned or emerging opportunities, such as piloting a new program, investing in innovative technologies, or responding to unexpected needs. In this sense it is the primary source for making informed decisions, assessing funding needs, and communicating financial expectations to your board and stakeholders. However, the budget type you choose will depend on the size of your nonprofit and where you are in your mission’s journey. Bottom-up budgeting starts with the people who know the details best—your team.

Nonprofit Budget Categories – Master the Essentials

This fully customizable template helps you determine your organization’s monthly, quarterly, and yearly net income so that you can gauge the financial health of your nonprofit’s budgeted operations. When preparing your NGO’s grant proposal, it’s crucial to include Accounting Services for Nonprofits: Benefits and How to Choose the Right Provider detailed budget categories to ensure your funding request is comprehensive and transparent. For additional resources on potential funding opportunities that could align with your project’s needs, consider exploring the list of USAID’s funding opportunities for NGOs worldwide. This resource provides a variety of options that could be suitable depending on your NGO’s focus and geographical scope.

How to Create a Budget Template

Transparent documentation and regular budget reviews enable accountability and adaptability amid fluctuating funding landscapes. Creating a nonprofit operating budget template involves several key steps. Start by gathering financial data from previous years, including income statements, balance sheets, and cash flow statements. Next, categorize the revenue and expenses in the budget template, making sure to allocate funds to specific programs or projects. Finally, review and adjust the budget template regularly to reflect any changes in the organization’s financial situation.

• Most organizations work with two primary budget types, each serving distinct purposes in your financial strategy.
• This article offers actionable insights and tools recommended by experienced grant writers to help boost your submission volume and improve your funding success.
• At this point, the budget committee should have a draft budget ready and do a thorough review of it.
• Their involvement provides diverse perspectives, fosters accountability, and supports informed decision-making.
• A key component of financial sustainability is the commitment of board and staff to financial management that includes timely review of financial reports and advance planning.

But each budget will include direct costs, those expenses related to the project or program you’re funding, as well as indirect costs that go along with running an organization. Depending on the type of grant you win, the award will cover only direct costs, or, if a general operating grant, it may cover much more. See how this professional budgeting software can transform your nonprofit’s financial management and help you better serve your mission. We look forward to partnering with you on your journey to financial excellence. Set organizational goals before discussing budget numbers with their boards. A budget should be preceded by or accompanied by set organizational goals, which will help nonprofits understand the financial implications of their proposals.

• The following “other expense” type accounts can be set up for tracking capital expenses for operations (equipment purchases over the capitalization threshold) or for a large capital campaign project.
• Having extra cash can help stabilize your nonprofit and absorb an unexpected delay in receiving funds, a shortfall in revenue for a special event, or unbudgeted expenses.
• Unlock the secrets to transforming your business from a job into a profitable, cash-generating machine.
• Equipment and supplies are vital components of an organization’s operational capacity.
• BoardEffect provides a secure platform for board communications where they can share confidential documents about the budget and other important board matters without concern over hacking.
• Your board of directors will see your budget at some point, but it’s important to know how involved they’ll be!

What Are the Different Types of Nonprofit Budgets?

• Creating an accurate budget for non-profit organizations depends on reliable forecasting methods and careful analysis of historical data.
• A share of these costs should be assigned to each program and support activity based on an approved allocation methodology.
• Grant-makers have the potential to contribute large sums to nonprofits and board directors should ensure that they meet the grantor’s requirements to qualify.
• It’s important to analyze industry standards when determining the pay rate for specific positions and what benefits to offer.
• Regularly monitor how aligned your projected budget is with what you’re actually experiencing, and make tweaks as you need to.

This is the most common type of budget, typically covering an entire fiscal year (usually 12 months). This approach establishes trust and openness within the organization, as your employees understand how their input influences the overall financial plan. A well-structured budget details how restricted and unrestricted funds will be allocated, ensuring transparency and accountability. Sign up for our newsletter to get the latest industry updates, expert insights, and exclusive downloadable resources—all delivered straight to your inbox.

Resources

Different projects require different supplies; these vary significantly from activity to activity. If the project supplies equal 25 percent or more of the total budget, divide the supplies into additional sub-categories. Include costs for https://nyweekly.com/business/accounting-services-for-nonprofits-benefits-and-how-to-choose-the-right-provider/ policies advised by your financial adviser and coverage required by law.

Explore all of the different sources of funding for nonprofits, popular funding models, and five simple steps for kickstarting a funding strategy for your organization. Givebutter’s top-rated tools are free because of donor tips, which helps it maintain the lowest pricing in the industry. Plus, Givebutter’s comprehensive fundraising platform includes a built-in CRM, marketing and engagement tools, and world-class fundraising features—all designed to help you reach your goal.

Contingency and Miscellaneous Costs

You can also use industry benchmarks and specific examples to demonstrate responsible resource management. Help stakeholders understand that effective administration actually multiplies the impact of their program investments. Consider staff costs, professional services, technology investments, insurance, and office expenses.