If there is an activity explained in your narrative that requires funding, it must be a line item in your budget. If the details aren’t clear or don’t https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ add up, a funder will see through your numbers. You can also use Instrumentl’s Grant Budget Template sample from the U.S. General Services Administration, which is a simple budget in Google Sheets that can be tailored to your specific budget line items. Capital grants are usually for large-scale items like construction, renovations, or equipment. If you make any assumptions (and you probably will) while creating your budget, be sure to make note of those assumptions.

• Help stakeholders understand that effective administration actually multiplies the impact of their program investments.
• Document both findings and planned adjustments to maintain accountability and track progress over time.
• I work with a team of writers and business and legal professionals to provide you with the best templates.
• A standard rule of thumb is to include a 3-5% bonus and benefits/tax costs at a rate of 25-30% of each employee’s salary.
• Having a timeline also allows you to track progress and make necessary changes.

Government vs Foundation Grants: Key Differences in Writing for Federal vs Private Funders

This ensures a comprehensive and accurate overview of an organization’s financial situation, facilitating effective budgeting. With this comprehensive annual nonprofit operating budget template, you’ll get  quarter-by-quarter and yearly insights into income and expenses. To calculate year-end budget totals, contrast income (e.g., sales, contributions, fundraising, etc.) with expenses (e.g., office equipment, transportation, utilities, etc.). Without an annual nonprofit budget, you’re essentially operating in the dark. 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.

Services

Your cash flow is the movement of money that comes in and out of your organization. Work to develop lasting relationships with any vendors, suppliers and partners as this will save you time, energy, and even money! Setting costs with them early on will make budgeting easier and help you avoid guesswork. It’s important to focus on annual goals, but make sure you also look beyond what you want to achieve this year, and include line items in your budget for long-term goals. Plus, with a budget plan you’ll be better able to manage operations with limited funds. Monitoring your budget throughout the year is the key to financial success, along with setting aside enough funds for marketing.

Revisit Your Budget Every Month

Like revenue, you’ll predict expenses based on what you’ve spent in different areas in the past. This process is easiest for fixed expenses, which stay constant each year. For example, the rent for your office is likely a fixed expense due to your contract with the building’s management company. However, you’ll also have variable expenses that change each year and may be more difficult to forecast. For instance, the costs of program materials and necessary transportation will likely shift over time.

Benefits to budgeting for nonprofits

It’s a strategic document that reflects the organization’s priorities, guides its decision-making, and helps it stay accountable to its members, donors, and the public. By leveraging nonprofit budget software, organizations can streamline this complex process, ensuring accuracy, efficiency, and transparency in their financial management. Nonprofit budgets are financial plans that outline an organization’s projected income and expenses over a specific period. They guide the organization’s financial decisions, effectively supporting the mission and goals.

• Since you’ll detail the source of each line item, you can pinpoint which areas need more resources and where you can cut back on spending.
• These reports offer insights into the organization’s financial health by showing how actual income and expenses line up with budgeted figures.
• Use a timeline when creating a nonprofit budget so that goals are realistic and time-based.
• They can mean the difference between surviving a rough patch and being forced to close down.
• The budget should include realistic revenue projections based on historical data and current fundraising capacity.