Blog

You’ll also want to get a clear idea of your revenue streams to understand where your money is coming from. Finally, your budget needs to establish a clear connection between the numbers and your goals. With that said, Sarah Lange, a grant consultant, advises grant teams not to undersell themselves either. Each line item in your budget should align with your overall narrative. If there is an activity explained in your narrative that requires funding, it must be a line item in your budget. You can also use Instrumentl’s Grant Budget Template sample from the U.S.

Additional Resources

ACCOUNTS by Software4Nonprofits is a specialized tool designed for non-profit organizations. This ensures a comprehensive and accurate overview of an organization’s financial situation, facilitating effective budgeting. The first step in creating a nonprofit budget is to determine the organization’s financial goals and objectives. This will help to ensure that the budget is aligned with the organization’s overall strategy and that resources are being allocated in a way that supports the achievement of these goals.

• The first is to make sure that all of the expenses are covered by the income of the organization.
• Likewise, factor in training and professional development to maintain team effectiveness.
• Nonprofits often face scrutiny over how much of their budget goes toward administrative expenses versus program-related activities.
• There are many resources to assist you with creating your own budget after you’ve considered all of the direct and indirect costs of your project.
• This will give you an idea of how much money the organization brings in from donations, grants, and other sources of revenue.
• The annual budget focuses on the nonprofit’s planned financial activities, expected revenue sources, and expenditures for the fiscal year ahead.

Budget for Nonprofit Project Template

Now that you know what should be included in your nonprofit budget, it’s time to start creating one. The process of creating a nonprofit budget is similar to the process of creating a budget for any other type of business. For new expenses, request quotes from vendors or providers to budget for these costs as accurately as possible. For example, you may reach out to the new bus company you plan to use for your organization’s summer camp to estimate how much their services will cost. Like revenue, you’ll predict expenses based on what you’ve spent in different areas in the past.

Nonprofit Budgeting: Step-by-Step Guide + Free Template

• The best way to calculate your expected income is to review your organization’s financial history and base your estimates on that.
• They can help organizations navigate complex regulations related to nonprofit finances while ensuring compliance with funding requirements.
• By organizing your budget and allocations this way, you’re also setting up the accounting system to track and report the three functional expense categories required on audits and the IRS Form 990.
• When everything is done, you can present the budget to the organization.
• That’s why we’ve put together the ultimate guide to making your own nonprofit program budget — complete with THREE free nonprofit budget templates.
• It’s especially important for nonprofits that may have irregular income streams or seasonal fluctuations in donations.

When your organization is not in line with the budget, you should look at “why,” and what factors you can control or change. This is where the budget becomes an effective management and operations 5 Main Benefits of Accounting Services for Nonprofit Organizations 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.

Your expenses will include the costs of running your nonprofit organization; such as salaries, rent, office supplies, and marketing. To estimate your expenses, review your organization’s financial history and base your estimates on that. If you don’t have a financial history to review, tally up the expenses you expect to incur.

• Articulate the main purpose of your budget and think about a structure that will best support that purpose.
• If you need assistance, reach out to a nonprofit accounting firm that can take care of this forecasting and reporting for you.
• Below is a basic nonprofit operating budget example to show how these components typically come together.
• Track your nonprofit’s project-specific budget with this basic template.
• Understanding and managing both fixed and variable costs helps you make smarter spending decisions and maintain financial flexibility.
• If your nonprofit relies heavily on grant funding, this budget outlines program costs to meet grantor specifications, including fund-matching requirements.

Support

Your board of directors will see your budget at some point, but it’s important to know how involved they’ll be! A https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ board can either be very hands-on or hands-off, depending on how you want to use them as a resource. When it comes to planning an event, executing it successfully depends on how prepared you are! A nonprofit project budget shows you what you have to gain without accidentally dipping into your operational expenses. When budgeting, nonprofits sometimes make the mistake of forgetting to account for in-kind donations or volunteer hours. You might not be able to predict what your donors give, but you can control a lot when it comes to spending.

Program expenses 🎒

Monitoring your revenue and expenses should ideally become a part of your nonprofit’s organizational culture, something everyone is aware of and contributes to. Mark the events in everyone’s calendars, so that it becomes easier to repeat the process each year. Here’s a very basic example—but remember that your organization’s budget might be more complicated than this (or maybe even simpler!).