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While you might have a comprehensive nonprofit business plan – situations can change, and so will your budget. If you don’t know what your goals are, your budget plan will fail to reflect them, and you might end up overspending on programs that don’t further the core purpose of your mission. The template includes a revenue summary section that calculates your total grant income and a net section to help you quickly determine your program’s financial sustainability.

Small Business

Let us not go directly into non-profit budgets and their templates, let me tell you a bit more about what budgeting really is, and why it is so important. Nonprofit fundraising, donor management, marketing, operations, community and project management, social media, branding, graphic design, website production. Sage Business Cloud Accounting (formerly Sage One) is an online accounting software that gives you anytime, anywhere access to the most important small business essentials. QuickBooks Online is a small business accounting software and app that allows you to manage your business anywhere, anytime. No matter what happens with your nonprofit, you never stop needing a budget! Set up your budget so it’s as simple as filling in the blanks come next year.

Acknowledge your goals

There are several types of grant budgets you might use in a grant proposal. 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. Setting aside a portion of the budget (typically 5-10%) as a reserve will help your organization handle unexpected challenges like sudden drops in donations, emergency repairs, or economic downturns. It helps prevent your organization from focusing only on total budgeted amounts without considering when the cash will actually be available.

• Travel may be necessary if staff members or volunteers attend conferences, meetings, or events related to your mission.
• This granular approach reveals insights that traditional budgets often miss, such as hidden costs that could affect program sustainability.
• Budgeting is the process of planning, organizing, and controlling financial resources and how they are allocated to achieve organizational goals.
• This alignment should be evident in both resource allocation and program funding decisions.
• For example, if your year-end campaign consistently brings in 40% of annual donations, factor this timing into your financial planning.
• Nonprofit organizations continually grapple with maintaining and improving their operations, especially in today’s volatile economy and a rapidly changing world.

Sample nonprofit budget layout and key components

Because nonprofit revenue streams can be unpredictable, and it’s easy to prioritize program funding over internal needs. This means that they have more income than they do expenses, which is a good position financially. Full Suite of Accounting, Payroll and Fund Raising and Fund Accounting applications for nonprofit organizations. Software designed for nonprofits and churches with fund accounting, donor management, giving tracking, reporting, and more. WildApricot is an affordable cloud-based software for small associations, non-profits, state and local chapter organizations. Manage membership, donations, accept payments, host your website, and run events.

Staff salaries and benefits

• This is especially important for nonprofits that rely heavily on grants or fundraising events, which often lead to large, irregular payments instead of a steady revenue stream.
• In regards to Currencycloud’s services when funds are posted to your account, e-money is issued in exchange for these funds, by an Electronic Money Institution who we work with, called Currencycloud.
• An effective nonprofit budget prioritizes important things that push your goals forward.
• Once your costs are set, you know precisely what numbers you can expect to work with.
• Variable costs are directly tied to events, increasing or decreasing and changing with each situation.

This organizing principle will help to track spending against your budget throughout the year and allow managers to identify what flexibility is available to them for mid-year adjustments. A budget for non-profit organizations should function as a living document, not a set-and-forget plan. Building operating reserves provides an additional buffer against temporary shortfalls.

• If your nonprofit relies heavily on grant funding, this budget outlines program costs to meet grantor specifications, including fund-matching requirements.
• It’s important to create a budget for each event you host—not only to account for these expenses, but also to allocate the revenue you’ll need to cover these costs.
• 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.
• Use a program-based approach to understand true costs, include adequate overhead allocation, and build in reserves.
• A budget for non-profit organizations must account for timing differences between revenue and expenses.
• Having a miscellaneous budget line offers flexibility in your budget, helping you cover unforeseen costs as they arise.

If you want to hire a new marketing director, you can look up salary trends to discover how much you need to pay them. Be sure to include all the payments that have gone toward your mission programs—including international payments. With these easy steps, you’re well on your way to creating a workable, up-to-date budget to help your organization thrive. Work to identify potential risks to your operations and create basic contingency plans that can make dealing with problems more straightforward when they occur.

You could easily overspend, winding up deep in debt or worse – unable to continue serving your beneficiaries. The best practices we shared in this guide are the fundamentals of sound budgeting for nonprofit organizations. A well-formulated nonprofit operating budget allows for the best use of limited nonprofit resources and focuses on the primary goals and objectives of the organization. In this article, we’ll discuss what is a nonprofit budget, its https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ importance, 12 best practices, a free template, and more. The expense side of your operating budget will typically be divided between program costs—i.e., any expenditures that directly further your mission—and overhead.

Other activities may require periodic or ongoing subsidy from fundraising or other program areas. Deciding whether and how to support these services is a central strategic decision for nonprofits. Knowing the real costs of each program allows us to make informed decisions and choices that will lead to mission and financial success. The annual budget focuses on the nonprofit’s planned financial activities, expected revenue sources, and expenditures for the fiscal year ahead. While the annual budget is the primary financial plan, organizations often use other types of budgets to manage different aspects of their finances.

FAQs on budgeting for nonprofit organizations

The responsibilites of a nonprofit board include a fiduciary duty to oversee and approve the budget. Once they give you a heads-up on your financial plan, you can implement it. Then, detail your expenses across program, administrative, and fundraising categories. By linking financial decisions to your mission and goals, you’ll make smarter choices about where to allocate resources. A well-crafted budget offers a benchmark for evaluating your organization’s financial performance over a specific period.