An excellent example of an effective budget narrative is offered by the Rose Community Foundation in Denver, CO. If your nonprofit operates a handful of programs, you definitely need some program budgets. When preparing your organizational budget for the board’s review, remember that the term “nonprofit” refers to your organization’s tax status. It doesn’t mean that you should have a break-even budget or show a budget that’s in the red. Budgets are also essential for tracking and predicting program expenses and providing insight into whether or not you can afford costs like new hires or upgrading your technology. In this article you will learn 7 nonprofit templates to help you streamline and simplify your budget-creation process.
Global Giving Nonprofit Budget Template
For example, if you have it in your plan to buy new computers for your staff or to build a new website, create a separate budget for those projects. Your board members should have a direct role in developing cash flow projections, agreeing on the assumptions to use, and reviewing the projections carefully. Keep in mind the difference between fixed and variable costs when you are tracking expenses.
What Should Be Included In a Nonprofit Budget
This category includes all the costs of hiring and retaining staff—including salaries, payroll taxes, health insurance, retirement contributions, and other benefits. Nonprofit organizations need to budget enough for these expenses to ensure they can attract and retain qualified staff while remaining financially sustainable. Recurring costs, such as inventory purchases, must be covered before indirect ones, such as office supplies, salaries of employees, and rent. The total amount should not exceed the total accumulated income of the non-profit organization.
- Administration and fundraising may have direct expenses assigned to them as well.
- In 2023, it allocated 46% of its program budget ($58.2M) for emergency disaster response.
- Instead of predicting revenue by individual grants or line items, the cutoff method looks at revenue as a whole.
- Your budget should be a financial roadmap that guides your decision-making process and helps you achieve your mission-driven goals.
- A surplus budget is a type of budget with higher estimated government revenues that reduces the public debt of the state or boost its savings.
- Make necessary adjustments to ensure the budget is both realistic and aligned with organizational priorities.
Sample Annual Nonprofit Budget Template
Use this template to step into the financial stability and strategic planning that will enable your organization to make a lasting impact on the communities you partner with. Moreover, you can easily edit this budget template according to your preferences and convenience. For a more convenient integration of your changes, it is best to use Google Sheets. You can add or remove categories, adjust budget amounts, and update actual expenses as you receive financial statements or make payments. A nonprofit budget is crucial as it helps you keep a check on your long and short-term goals.
What is nonprofit budgeting?
This is where the budget becomes an effective management and operations tool for your organization. This allows for a better overview, more speedy addressing of any potential issues, more nimble management of the staff and volunteers, and a more informed everyday decision-making process. Budgeting for a surplus allows you to support future innovations and invest in your staff. The goal is to avoid the “nonprofit starvation cycle” of never having enough to invest resources in infrastructure, or having an overhead that is “too lean” to effectively run the organization. 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.
The state law and the Internal Revenue Service (IRS) allows nonprofit organizations to provide their staff with a reasonable salary. Google Sheets budgeting templates are the perfect solution for correctly appropriating funds and expenses, resulting in a workable cash flow, so you can continue to focus on your https://nyweekly.com/business/accounting-services-for-nonprofits-benefits-and-how-to-choose-the-right-provider/ mission. Nonprofits are organizations, associations, cooperatives, or any group of individuals who voluntarily gather to perform either educational, religious, or public services.
- This focus on cash flow improves short-term planning and the nonprofit’s ability to address immediate and often unexpected financial needs, making it more resilient.
- This category includes all the costs of hiring and retaining staff—including salaries, payroll taxes, health insurance, retirement contributions, and other benefits.
- When your organization is not in line with the budget, you should look at “why,” and what factors you can control or change.
- 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.
- 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.
It details the costs your organization will incur and the revenue you expect to receive over a set period of time. Budget planning is the estimation of earnings and costs for a given time frame. Sample budget planning will permit you to figure out if you have enough money for your savings Everything You Should Know about Accounting Services for Nonprofit Organizations and expenses. Even with its importance, not many people observe budget plans some do, but do not follow it strictly. If you are planning on starting a budget plan and are looking for templates to guide you, check out our website for an entire collection of budget templates. Your annual nonprofit budget is a straightforward document with all of your projected expenses and revenue for the year.