Nonprofit Budget 2025: Steps, Planning, Examples & Template

If you’re managing a multiple six- or seven-figure budget, asking a financial expert for help is always a good idea. 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. As you go along, don’t be afraid to make changes and adjustments to your budget to better fit the year’s actual numbers.

Budgeting: A 10-Step Checklist

If your nonprofit is new and you don’t have several years of budgets, then you’ll have to tell them that. But, if you do have several years of budgets, then you’ll need to make sure it’s all in order. This means submitting it all on one spreadsheet with clear formatting and labeling. Your goal is always to make it as easy as possible for the grantmaker for find the information they need.

Nonprofit Accounting Terms

• And also, make a simple list of the people who will be taking care of the nonprofit budget for your organization.
• For each reporting period, the organization assesses its actual performance in comparison to the initial plan, ensuring progress and financial stability.
• Compile your income projections, expense estimates, and resource allocations into a draft budget.
• Good communication between the program, finance, and development departments and the board is key to monitoring the budget during the year.
• The opinions and views expressed in this article are solely those of the authors.

These numbers will often be estimates based on your goals or what you earned and spent last year. It’s important to be realistic in reviewing income sources and expenses. Board directors should be careful to consider the state of the economy and any unusual or unforeseen financial situations of their contributors. The Smartsheet platform makes it easy to plan, capture, manage, and report on work from anywhere, helping your team be more effective and get more done. Report on key metrics and get real-time visibility into https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ work as it happens with roll-up reports, dashboards, and automated workflows built to keep your team connected and informed.

Balancing Program Vs. Administrative Costs

Capital budgeting allows nonprofits to allocate sufficient funds for future growth projects, enhancing their ability to manage long-term initiatives. Focusing the operational budget on day-to-day activities helps nonprofits better manage resources and achieve strategic goals. When estimating grant income, adjusting the expected amount based on the likelihood of receiving each grant can provide a more accurate revenue forecast. Additionally, reviewing financial statements from the past few years can reveal seasonal variations and recurring expenses, aiding in creating a realistic and effective budget. Grounding budget projections in historical data ensures financial plans are achievable and aligned with the nonprofit’s capabilities.

A fresh perspective comes from starting each fiscal year with a new comprehensive budget. If the structure or mission of your organization seems to share some things with them, that’s a good sign that you should apply. Creating lasting relationships with your suppliers and partners will save you time, energy, and even money! The better relationships you build early on, the easier things will be in coming years. Consider who’s available to give you the most useful insight—is there an experienced head of finance supporting you, or a treasurer? Checking in with multiple departments will help you better understand the big picture.

• We’ve already talked about managing your budget with Relay, but we know nonprofit financial management doesn’t stop there.
• Does your nonprofit use small equipment, software subscriptions, or office supplies?
• Track your organization’s financial performance against the budget throughout the year, making adjustments as needed to respond to changing circumstances.
• If you’re one of the many nonprofits operating on a tight budget, Givebutter has you covered.
• Keep your expenses sorted into categories (fixed and variable), and maintain a budget for capital expenditures that is separate from your operational budget.

Araize FastFund Software Suite

In-kind donations should be assessed as to their fair market value (FMV) and listed as both revenue and expenses so that they cancel each other out. A budget is a planning tool that reflects an organization’s programs, mission, and strategic plan. A solid annual operating budget is at the core of an effective nonprofit financial management strategy. If your nonprofit has the financial flexibility to budget for a revenue surplus, do so!

There are lots of budgeting templates available online or you could create one of your own. Your operating budget, also known as a broad scope budget, gives you a financial picture of the activities your organization has planned for the coming year. Boards also use the operating budget to show projections of various amounts of revenue and their sources.

• Well-developed budgets help your nonprofit be financially transparent with its team, board, supporters, and community at large.
• It’s also very important to the success of your programs that your revenue and expenses estimates are realistic.
• In this article, we will discuss what should be included in a nonprofit budget, how to create one, and provide a template and example budget to help guide you through the process.
• It also means any extra funding you have at the end of the year can be put into a long-term savings account for your nonprofit.

Ready to Take Your Nonprofit Marketing to the Next Level? Book a Free Consultation

When you’ve got big marketing dreams, a financial breakdown will help you decide where you really want to allocate your resources. According to the National Council of Nonprofits, about 8% of 501(c)(3) organizations manage budgets of over $1 million per year. However, most nonprofits are community-based and work with smaller budgets of less than $500,000 annually. Although it’s never too late to make a budget, the accounting services for nonprofit organizations process should ideally start two or three months before the beginning of your next fiscal year.