A budget for a nonprofit gives structure and substance to its plans. The budget also plays a key role in forcing organizations to prioritize their activities budgeting for nonprofits so as to determine those that are most critical for fulfilling their mission. There are a number of tools that can assist in creating a nonprofit budget.
This can be based on the amount of money you need to raise to cover your expenses, or it can be a specific dollar amount that you would like to raise. The TCTAC partners will help organizations navigate grant requests, develop budget scenarios, manage their projects, and evaluate the outcomes. They will also provide training for groups to manage these processes on their own in the future.
Start Early and Follow a Set Process
Your budget will be unique to your organization, but we’ll give you a broad idea of what to include under each section. 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. Keep in mind the difference between fixed and variable costs when you are tracking expenses. Variable costs are directly tied to events, increasing or decreasing and changing with each situation.
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. That’s why we’ve put together the ultimate guide to making your own nonprofit program budget — complete with THREE free nonprofit budget templates. It allows organizations to prepare for unexpected events and respond appropriately so they can achieve their goals. Nonprofits must review their contingency plans regularly and make necessary adjustments so they are prepared for any eventuality.
Context Is Key
The budget should include donor outreach and fundraising expenses, such as marketing and event expenses. Nonprofits also must track their donation sources and analyze their fundraising efforts’ effectiveness to help identify opportunities to improve their fundraising activities. The budget also should reflect the organization’s strategic plan, outlining its goals and objectives. This approach helps confirm that the budget is aligned with the nonprofit’s mission and vision and that resources are allocated toward achieving the desired outcomes. To ensure that all expenses are accounted for, it is helpful to create a budget template that can be used on an annual or monthly basis. This template should include line items for all of the above expense categories, as well as others that may be specific to your organization.