For even more detailed planning, you can also create a capital budget (used for long-term projects) and various grant budgets (for defining how you’ll use funds if your grant proposal is accepted). It’s not just about balancing the books; it’s about creating a clear financial roadmap, a basis that aligns resources with mission-driven goals. A well-crafted nonprofit budget ensures financial sustainability, supports strategic decision-making, and fosters transparency with donors, stakeholders, and the communities you serve. In short, for nonprofits, where every dollar has a purpose, efficient budgeting is highly important.
Evaluate your organization’s financial health 🔎
Your capital budget includes projects that have an ongoing impact on your operations. A capital budget is also used to plan for major expenses like construction costs and other big, one-time expenses that take more than a fiscal year to fund. Given the significance of personnel expenses to our finances, allocating these costs is essential to understanding https://greatercollinwood.org/main-benefits-of-accounting-services-for-nonprofit-organizations/ true costs. Many Executive Directors spend a substantial amount of time working directly in programs. Ideally, salary allocations will be based on regular, reliable tracking of time.
Downloadable Grant Budget Templates
- However, you’ll also have variable expenses that change each year and may be more difficult to forecast.
- You can download this example here and repurpose it to use as your own budget template.
- For a wider selection of blank budget templates, check out more options here.
- When putting in the numbers for your revenue, make sure you know exactly where your funds will come from.
- For example, if you are seeking a $10,000 grant with a 75% chance of being awarded, adjusting the revenue forecast to $7,500 accurately reflects the projected income.
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. Since you have some control over these expenses, this is where a lot of decision-making will happen. Every accounting system has a chart of accounts which classifies the sources of revenue and the types of expenses you incur. Use the same categories in your budget to easily generate financial reports to funders and others.
- The budget paints a clear picture of how much cash is coming in and how much is going out.
- In determining the income budget, the committee will need to project income based on the current fundraising and revenue activities.
- For example, the rent for your office is likely a fixed expense due to your contract with the building’s management company.
- This feature allows non-profits to forecast and manage their finances according to expected seasonal variations.
Select allocation approach and methods
A grant budget is a detailed financial plan that outlines the estimated expenses of your proposed project or program for which you’re seeking funding. If the budget isn’t carefully crafted or doesn’t fall in line with the requirements of the funder, it could cause you to lose the award. If you’re ready 5 Main Benefits of Accounting Services for Nonprofit Organizations to work with us for your nonprofit budgeting and other financial management needs, don’t hesitate to contact us so we can get started. One of the greatest challenges of running a nonprofit is balancing what you want to accomplish with the resources you actually have. At the end of the fiscal year, assess your organization’s financial performance and the effectiveness of the budgeting process.
List income sources and figures in monthly columns to determine month-by-month total income. Enter project expenses in the same month-by-month columns to compare total expenses to total revenue. Managing a budget for a nonprofit organization is much like planning a household budget, except that there are generally more sources of income and more categories of expenses. In both cases, a sound budget is important for financial sustainability and provides a guide for financial health and sustainability. From a sample nonprofit budget template to comprehensive nonprofit annual budget templates, it covers all the essentials to keep your budget on track.
