Budget for Non-Profit Organizations: Guide for 2025 SBHQ

Tu Phan 26/11/2021

how to create a budget for a nonprofit

Regular comparison of budget versus actual figures highlights areas needing attention before they become problems. Variable costs, like program supplies, event expenses, and part-time staff hours, offer flexibility when funding fluctuates or new opportunities arise. This alignment should be evident in both resource allocation and program funding decisions.

Create Your Nonprofit Budget: 9 Simple Steps + Free Template

how to create a budget for a nonprofit

She has produced over 100 events and raised millions of dollars for organizations Cystic Fibrosis, Jane Goodall’s Roots and Shoots and Union Rescue Mission. Below I share with you an effective nonprofit event budget worksheet that is easy to create on an Excel spreadsheet. As a person who has struggled with math, learning how to create a nonprofit event budget was daunting. Not only are there a ton of numbers and figures, which typically make my pulse race anyway, but also there are so many budget items to figure out and include. Tip #8 Separate operations expenses from capital, equipment, and special projects. If you’re planning on purchasing a vehicle, renovating a facility, or have some other special project in mind, create a separate budget just for that.

Nonprofit Operating Budget

The Nonprofit Finance Fund (NFF) offers sophisticated budget templates and financial planning tools designed for nonprofits seeking to strengthen their financial management practices. Their templates emphasize cash flow management, scenario planning, and strategic financial planning. These resources are particularly valuable for organizations in growth phases or facing financial challenges.

Important considerations in evaluating a nonprofit budget

For each scenario, you should outline specific action plans to maintain financial stability. This proactive strategy enables quick, informed decisions when faced with financial fluctuations, ensuring your nonprofit remains resilient and mission-focused throughout the year. Administrative expenses might not be the most exciting part of running a nonprofit, but they’re absolutely necessary. These costs cover the behind-the-scenes essentials that keep everything moving smoothly. Many nonprofits hesitate to reveal how much they spend on overhead costs with donors. Reframing overhead costs as stepping stones to making an impact can help donors understand why not all their funds go directly to programming.

Without an annual nonprofit budget, you’re essentially operating in the dark.
Administrative oversight, financial management, IT support, insurance, facility maintenance, volunteer coordination, and grant compliance all contribute to program success.
A well-structured nonprofit budget serves as your organization’s financial planning roadmap, guiding decisions about program investments, staffing needs, and growth opportunities.
Let’s dive into the details of a nonprofit operating budget—what it is, what to include, and how to put it all together.
Nonprofit operating budgets typically include expected revenue as well as various expense categories that reflect the organization’s day-to-day activities and operational needs.
You need to know how your nonprofit’s cash flows and what to do if the cash doesn’t flow.
If the details aren’t clear or don’t add up, a funder will see through your numbers.

Accounting & Finance

This is more than just numbers—it’s a guide to keeping your mission on accounting services for nonprofit organizations point. Withum’s Outsourced Accounting Systems and Service Team is here to support your nonprofit’s accounting and finance operations. Next, operating expenses should be budgeted first due to their predictability and necessity in keeping the organization running. When building your budget, be sure to include office expenses, technology subscriptions, general overhead, salaries and fringe benefits.

how to create a budget for a nonprofit

You’ll thank yourself https://greatercollinwood.org/main-benefits-of-accounting-services-for-nonprofit-organizations/ later for having worked towards a long-term plan from the start. If you are interested in working for a nonprofit, it’s helpful to understand the differences between nonprofits and find ways to translate your experience into a job with one. From Executive Director to Program Manager, find out what you are a great fit for. If you use accounting software to for your budget, there is the benefit of those budget to actual reports we discussed earlier.

how to create a budget for a nonprofit

While each of the previous tips offers specific guidance for your nonprofit budget, bringing them together into a cohesive financial management system takes careful orchestration. Your strategic plan should include clear timelines for implementing these budgeting practices. Even profitable programs can face challenges when expected revenue arrives months after expenses occur or when donation patterns don’t align with regular operational costs. Mastering cash flow management helps prevent these timing mismatches from disrupting your mission-critical work. At this point, the budget committee should have a draft budget ready and do a thorough review of it. The review should include verifying that the budget is able to meet program and organizational goals.

This free operating budget template can simplify the budgeting process.
It lets you track expenses closely, preventing overspending and identifying cost-saving opportunities.
You’ll thank yourself later for having worked towards a long-term plan from the start.
3 Please note that funds relating to Currencycloud’s services are not FDIC insured or protected by the Visa Zero liability protection policy.
A common misconception about operating budgets is that because nonprofits by definition can’t turn a profit, their budgets have to break even every year.

Are you looking to expand a program, hire additional staff, or purchase new technology? Creating a budget for your nonprofit organization is a meticulous process that demands careful planning and execution. Leveraging a comprehensive tool like NonProfit+ can significantly streamline this process, helping you create a budget that is realistic, achievable, and aligned with your organization’s goals. This toolkit empowers nonprofits to move beyond basic budgeting and embrace financial management as a strategic driver of mission impact.

Budget for Non-Profit Organizations: Guide for 2025 SBHQ

Create Your Nonprofit Budget: 9 Simple Steps + Free Template

Nonprofit Operating Budget

Important considerations in evaluating a nonprofit budget

Accounting & Finance

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