How to Create a Nonprofit Operating Budget + Free Template

If you’re creating a budget for the first time, create as reasonable a list as possible of expenses. Nonprofit organizations continually grapple with maintaining and improving their operations, especially in today’s volatile economy and a rapidly changing world. They must constantly strive for sustainability, and an essential part of that quest is proper budgeting.

• This will give you an idea of how much money the organization brings in from donations, grants, and other sources of revenue.
• It’s not designed to cover large expenses such as capital projects, i.e buying a building.
• I also want to encourage you to look towards your association groups to see if they provide some benchmarking information too.
• 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).

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Include program expenses in your nonprofit program budget template to ensure that your resources are used efficiently while achieving your mission goals. Personnel costs are the expenses related to compensating your nonprofit’s staff. Including personnel costs in your nonprofit budget template helps you plan ahead and keep finances under control. Operational budgets estimate the day-to-day operations of the business, covering expenses such as rent, utilities, wages, and other supplies. The operational budget guides how money should be allocated and spent, tracks where resources are going, and identifies areas for potential cost savings.

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These professionals focus on your financial strategy and can use specialized tools to forecast your nonprofit’s cash flows for more effective resource allocation. In this guide, we’ll walk through four essential steps to build an operating budget for your new nonprofit. As you follow this process, always remember to align your budget with your organization’s general goals and plans for future growth. This budget template is designed to help nonprofits quickly and accurately estimate operating expenses while creating a plan to reach their goals in the new year. Every nonprofit is unique, so feel free to adjust the categories and templates to fit your needs. Travel may be necessary if staff members or volunteers attend conferences, meetings, or events related to your mission.

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See how the online fundraising market is changing, what nonprofits are doing, and how you can adapt your strategies for sustainability and growth. For example, your goal for 2025 can be to increase fundraising revenue by 20% to support a new educational outreach program. For example, many nonprofits found these reserves very important (or regretted not having them) when the COVID-19 pandemic hit in 2020. You’ve probably used key performance indicators for various aspects of your nonprofit’s strategy in the past. For example, if you know your goal is to raise $500,000 for your nonprofit, you can easily see that you succeeded when you raise $530,000.

Utilize BetterWorld’s platform for nonprofit fundraising solutionsSet up a campaign and start raising money in as little as five minutes. Select and customize the fundraising method best suited for your organization. Nonprofits typically allocate between 5 and 15% of their overall budget to marketing, with fundraising costs ideally staying at or below 15%.

Once you have a general idea of how much money you need to bring in, you can start to develop a budget. Learn the essentials of developing accounting services for nonprofit organizations a nonprofit budget—tips, best practices, and free resources to help you build a strong, credible budget or refine your current one. Take our 2-minute survey to find out if outsourced accounting and bookkeeping is a good fit for your organization. This is also where you should estimate bookkeeping any earned income or program fees if they apply to your situation. Read on as we break down the process step-by-step and answer some critical questions many nonprofit leaders often have.

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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. Support organizations dedicated to providing clean and safe drinking water to communities in https://nyweekly.com/business/accounting-services-for-nonprofits-benefits-and-how-to-choose-the-right-provider/ need. Good communication between the program, finance, and development departments and the board is key to monitoring the budget during the year.