The Ultimate Guide to Nonprofit Budgets + 3 FREE Templates

In fact, healthy nonprofits will do this to help fund 3-6 months of operating reserves. There are a number of tools that can assist in creating a nonprofit budget. Some of the best options include Google Sheets, Excel, and budgeting software programs like Xero or QuickBooks. When determining how to allocate funds, it is important to consider the organization’s overall goals and objectives. For example, if the goal is to accounting services for nonprofit organizations increase access to services, then a greater proportion of funds should be allocated to program expenses.

Budget for Nonprofit Project Template

Beyond basic income and expense tracking, build in space for context and analysis. Note funding restrictions, timing considerations, and progress toward goals. Every successful budget for non-profit organizations balances mission impact with financial stability.

Different Budgeting Techniques

Engage, build bonds, showcase impact, and elevate conversations effortlessly. Finally, your budget needs to establish a clear connection between the numbers and your goals. With that said, Sarah Lange, a grant consultant, advises grant teams not to undersell themselves either.

Budgeting: A Guide for Small Nonprofit Organizations

It should also include program revenue, demonstrating to potential funders that you have a clear plan for how to obtain funding for the specific project or program. Nonprofits fund employee salaries through diverse revenue streams, including grants, donations, program fees, and earned income. Many organizations include salary costs in grant proposals and build appropriate overhead into their program budgets. Successful nonprofits prioritize competitive compensation to attract and retain talented staff while maintaining transparent communication with donors about staffing costs. This process is most valuable when a nonprofit can understand both the full cost of delivering programs and the amount and type of income that relates to those programs. Leaders can use this information to analyze the financial model of programs individually and as part of the whole.

• Once financial goals are established, the next step is to allocate resources effectively within the nonprofit program budget.
• There’s a lot of advice you’ll hear through the grape vine regrading grant budgets.
• Utilize BetterWorld’s platform for nonprofit fundraising solutionsSet up a campaign and start raising money in as little as five minutes.
• Customize your template based on your organization’s specific needs and reporting requirements.
• Most organizations work with two primary budget types, each serving distinct purposes in your financial strategy.
• Involve key stakeholders in the planning process and create regular review cycles for monitoring and adjustments.

What is a Nonprofit Budget Template?

Involve key leadership to contribute guidance and details from the start. Embracing a mindset of adaptability not only enhances financial resilience but also positions nonprofits to respond effectively to evolving community needs. Evaluation should also extend beyond mere numbers; it should include assessing the effectiveness of spending in relation to program outcomes. Nonprofits should ask themselves whether their investments are yielding the desired impact on their target population.

• With the right tools and strategies, your nonprofit can confidently build a financial foundation for 2025 that ensures stability and amplifies your mission.
• Program-based budgeting helps you understand the true cost of each initiative, measure actual performance, and make informed decisions about resource allocation.
• Our online business banking and money management platform allows nonprofits to open 20 individual checking accounts for program budgets, operating expenses, and beyond.
• The capital budget may include projects which will have ongoing effects on operations.
• Start with your known fixed costs like rent, utilities, salaries and insurance.
• Budget planning includes some degree of forecasting and assumptions and boards should thoroughly vet assumptions before finalizing the budget.

Once you have a total salary cost, use that figure to calculate each of the employee related expenses. For example, if your total salary cost is $100,000, then your FICA cost will be $7,650 (7.65% of $100,000). You may see many nonprofits start as grassroots organizations, and at that stage it’s reasonable to use spreadsheets to plan budgets. To help you avoid these pitfalls, here are some essential budgeting best practices to keep your nonprofit financially stable and mission-focused. If your nonprofit relies heavily on grant funding, this budget outlines program costs to meet grantor specifications, including fund-matching requirements.

Leveraging Technology for a Strong Board Email Retention Policy

We hope that you will be able to use this resource to understand the concepts and steps and to implement this valuable process at your nonprofit. When an expense is clearly and exclusively incurred for a specific program area or cost center, we simply assign the expense to that program area or cost center. Examples might include materials purchased specifically for a tutoring program or the cost of an evaluation consultant to document the results of a preschool program. Administration and fundraising may have direct expenses assigned to them as well. The cost of return envelopes to be included in a fundraising mailing would be assigned directly to fundraising.

• Even still, some donors may be unwilling to contribute directly to overhead costs.
• These articles and related content is the property of The Sage Group plc or its contractors or its licensors (“Sage”).
• While familiar, this approach might keep you from spotting opportunities for significant improvements.
• His passion for empowering nonprofits and tech expertise have shaped BetterWorld’s mission to make fundraising more accessible and efficient.
• You need to know how your nonprofit’s cash flows and what to do if the cash doesn’t flow.

Essential Components of a Program Budget Template

This alignment helps create more accurate forecasts and smoother cash flow management. Your budget will be unique to your organization, but we’ll give you a broad idea of what to include under each section. It’s important to be realistic in reviewing income sources and expenses. Board directors should be careful to consider the state of the economy and any unusual or unforeseen financial situations of their contributors. Investing in some nonprofit budget software will make keeping up with your budget a breeze. Running a nonprofit is a lot like learning to juggle—exciting as the skill is, it’s harder than it looks!

Sample Organizational Operating Budget

Every nonprofit approaches program budgeting differently, depending on the services offered. You need to know how much is coming in, where it’s going, and whether you’re staying on track. This is more than just numbers—it’s a guide to keeping your mission on point.