Nonprofit Budget 2025: Steps, Planning, Examples & Template

Ensuring that resources are used efficiently and in alignment with the organization’s goals is essential. Effective expense management plays a central role in this endeavor, enabling nonprofits to maximize the impact of every dollar spent. For the purposes of this article, we’ll focus primarily on operating budgets because of their central role in accounting services for nonprofit organizations nonprofit finance. However, you can adapt some of our tips to create other types of budgets. Additionally, remember that any budget that covers a specific aspect of your nonprofit’s spending and fundraising should align with your operating budget.

Reviewing and Adjusting the Nonprofit Operating Budget

• It offers a user-friendly layout that allows for detailed tracking of both income and expenses, ensuring that organizations can maintain oversight of their financial health.
• An organizational budget provides an important roadmap for each fiscal year and it acts as a touchstone on which to monitor an organization’s fiscal health.
• Leaders can use this information to analyze the financial model of programs individually and as part of the whole.
• Effective financial management is the backbone of a thriving nonprofit, ensuring stability, transparency, and informed decision-making.

Running a nonprofit is a lot like learning to juggle—exciting as the skill is, it’s harder than it looks! If you’re looking for a way to keep all those balls in the air, nothing is more valuable than a foolproof nonprofit budget. Once you have added all of your anticipated revenue and expenses, you can calculate your projected operating profit and projected operating margin. This category can help your organization cover unexpected repairs, unplanned staff meals, and other odds and ends.

True Program Costs: Program Budget and Allocation Template and Resource

• Programs are more effective, better managed, and more responsive to the community when an organization has good accounting and technology, high quality leadership, planning, and governance.
• Nonprofit operating budgets typically include expected revenue as well as various expense categories that reflect the organization’s day-to-day activities and operational needs.
• Nonprofits aim to generate a modest profit to preserve their financial sustainability.
• While not specifically a budget, a cash flow projection can help keep your nonprofit on track financially.
• Nonprofit organizations have several sources of revenue—some of which are more dependable than others.

Well-designed budget templates streamline financial management while ensuring https://nyweekly.com/business/accounting-services-for-nonprofits-benefits-and-how-to-choose-the-right-provider/ you capture all essential information for decision-making and reporting. Even organizations working with a shoestring budget must think carefully about costs. Some of your organization’s expenses remain steady month after month, while others change based on your activities.

Capital Budget

In 2023, it allocated 46% of its program budget ($58.2M) for emergency disaster response. Lastly, it’s rare that nonprofits have unlimited funds, so they need to be realistic and thoughtful about setting restrictions on what they can spend money on. Your budget should consist of the income you expect to make and the expenses you expect to incur. These numbers will often be estimates based on your goals or what you earned and spent last year.

Additionally, budgeting provides a transparency mechanism, as it can communicate the management of resources to your stakeholders. Propel Nonprofits is an intermediary organization and federally certified community development financial institution (CDFI). There are as many forms of nonprofit budgets as there are forms of organizations.

• 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.
• 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.
• Nonprofit budgeting follows a similar process, except you’re projecting revenue and expenses for your entire organization.
• So, here’s a helpful guide to creating a budget for your small nonprofit.
• To be even smarter and make your life and the budgeting process easier next year, there are two things you can do.
• Let’s dive into the details of a nonprofit operating budget—what it is, what to include, and how to put it all together.

To help you avoid these pitfalls, here are some essential budgeting best practices to keep your nonprofit financially stable and mission-focused. A popular rule of thumb is to ensure that at least 65% of total resources go to program costs, such as materials, rentals, and operations, while overheads never account for more than 35% of resources. Program-specific budgets detail the income and expenses related to a specific initiative, such as a youth mentoring program, a community food bank, or an educational campaign.

• This sample budget for nonprofits is a template for an organizational budget for a fiscal year.
• You’ll want to include campaign expenses, such as consulting fees, travel, printing, web upgrades, events, and donor recognition in the campaign budget.
• Plus, the easy-to-use format makes it simple to track your progress and make adjustments as needed.
• They can mean the difference between surviving a rough patch and being forced to close down.
• No matter what, it’s always nice to see a surplus and think about how to use it most effectively to build your organization even stronger.
• Work to develop lasting relationships with any vendors, suppliers and partners as this will save you time, energy, and even money!