Use this operating budget template to ensure that your nonprofit has accounted for every single cost and expense. By doing so, you can keep an eye on your big-picture forecast with the assurance that every detail of your accounting is in order. With this comprehensive annual nonprofit operating budget template, you’ll get  quarter-by-quarter and yearly insights into income and expenses.

The Role of the Board in Nonprofit Financial Oversight

Although it’s never too late to make a budget, the process should ideally start two or three months before the beginning of your next fiscal year. This allows you enough time to gather all the information you need and to present the budget to your nonprofit board for approval. Budgeting for non profit organizations is, perhaps, the most important financial document for your organization because it is a financial management and strategic tool.

Additional Resources

This gives you a bit of wiggle room if your cost estimates came in low or your revenue estimates turned out to be too optimistic. The two primary components of a budget are income and revenue, and many subcategories fall under the umbrella of each. Donors and stakeholders demand transparency in how their contributions are utilized. It publishes detailed annual reports to share its budget allocation and impact with stakeholders. A thoughtful budget is not restricted to being an operational tool, it’s a statement of accountability, a roadmap for growth, and a catalyst for change. These projects probably won’t be delivered every year, so separating your operational budget from your capital budget is the best way to go forward.

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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. Below is an example of a nonprofit budget to give you an idea of what you need to do. This budget includes expected income, expenses, and funding for a small nonprofit organization.

• While familiar, this approach might keep you from spotting opportunities for significant improvements.
• The most successful nonprofits treat budgeting as an ongoing strategic process rather than a yearly task.
• This can be a more time-consuming and difficult process, but it can also lead to a more accurate and transparent budget.
• When creating a budget for non-profit organizations, understanding these core elements is essential.
• When you are running a fundraising campaign and say that all donations will go directly to program expenses, those are restricted funds that you need to use to support programs.
• Many nonprofits also use a budgeting technique called cost-benefit analysis.

Budgeting is the process of planning, organizing, and controlling financial resources and how they are allocated to achieve organizational goals. It’s important to budget because it helps the organization manage its funds in a more effective way. Budgeting a nonprofit organization is considered the hardest type of budgeting. Because in this article, we explain in detail what non-profit organizations are, what their budgets are, how they perform their budgeting, and why it is different from other profit organizations. And if you are someone from a non-profit organization, looking for a type of template that could help you in your budgeting, you have come to accounting services for nonprofit organizations the right place. Most likely, your organization’s executive director will lead the budgeting process, but a nonprofit accountant can also provide support.