4 Types of Nonprofit Budgets and How to Create Them

Without an annual budget, you’re swinging in the dark, and could easily overspend, winding up deep in debt or worse, unable to continue your programs. Now that we’ve covered why you need a budget and what one looks like let’s unpack a few best practices for optimizing your budget as a nonprofit leader. You’ll learn from and improve on this process through time and effort, but hopefully, these tips save you some time and potentially costly mistakes. We looked at a few organizational budgets, each with variances and different elements. These are a few of the most common terms you’ll see showing up on budgets. You can keep all the information in one excel sheet, or break it up into different pages.

• If you are looking for a more transparent and accountable budget, you may want to consider using a zero-based budget.
• Learn all the best practices of CRMs to simplify customer relationship management and elevate your bond with loyal customers.
• Start with a nonprofit budget template excel sheet that includes all the expenses you can think of.
• This is the budget of revenues received and expenses paid, broken down monthly to ensure cash will be there when needed.
• Monitoring your budget throughout the year is the key to financial success, along with setting aside enough funds for marketing.
• If you are still unsure of how to develop a budget, you can consult with a financial advisor or accountant.

#2 Nonprofit Operating Budget Template

Even still, some donors may be unwilling to contribute directly to overhead costs. You can download slides below and here’s a transcript of this recording. It publishes detailed annual reports to share its budget allocation and impact with stakeholders.

• While the tips above will help your nonprofit create better budgets, you should also know that effective budgeting isn’t a set-it-and-forget-it activity.
• With so many different revenue sources and expenses, it can be tough to manage your nonprofit budgets.
• Give yourself enough time to gather the necessary information and data, to think through and discuss the various elements of the budget, and to put it down on paper (or in Excel).
• This not only helps create a more accurate and comprehensive budget but also ensures buy-in across the board.
• However, if your organization can budget for a revenue surplus, you should!
• Every one of these activities is vital to your organization’s impact—and every one needs its own budget to ensure funds are used effectively to accomplish it.

Don’t fall into the overhead myth.

While familiar, this approach might keep you from spotting opportunities for significant improvements. A fresh perspective comes https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ from starting each fiscal year with a new comprehensive budget. Consider donor retention rates, grant renewal probabilities, program participation trends, and seasonal fluctuations.

Context Is Key

Divide the annual amount by the number of months left in your fiscal year. Remember to include, record, and track non-monetary contributions with you budget. This might include volunteer hours or non-monetary contributions such as vehicles or other equipment. Keep your expenses sorted into categories (fixed and variable), and maintain a budget for capital expenditures that is separate from your operational budget. YPTC is not a CPA firm, and provides no attestation services with regard to financial reports.

Fundraising

Rushing the budgeting process could cause errors, which could result in future issues – especially troubling for nonprofits who need to report their finances and budgeting to grantors. A nonprofit budget is a financial document that provides a detailed view of how the organization plans to spend its 5 Main Benefits of Accounting Services for Nonprofit Organizations money, and what it aims to achieve over a 12-month period. Proper budgeting can help make sure you use resources effectively, prevents overspending and ensures the financial health of your organization. Your nonprofit’s budget will be different, depending on the size, income and expenses of your organization.