This includes determining how much revenue will come from small, mid-level, and major gifts, as well as whether you’ll use any existing funding toward the initiative. You should also create an initial timeline for the project so you can check in on your spending and fundraising as it progresses. Involve board members, department heads, program managers, and financial officers. Each stakeholder provides unique insights into the organization’s priorities and operational needs.

Business Membership

To help pick out the signal from the noise, we interviewed several seasoned grant professionals. For example, one of the helpful grant budget examples comes from the Substance Abuse and Mental Health Services Administration (SAMHSA). You can download this example here and repurpose it to use as your own budget template. We interviewed over a dozen grant consultants and professionals to understand what grant budgets need to pass the sniff test with funders and convince them to open up checkbooks. It doesn’t matter if you’re applying for a government, corporation, or foundation grant, a well-crafted budget will make or break your proposal.

Allocation Methods

The goal is to avoid the “nonprofit starvation cycle” of never having enough to invest resources in infrastructure, or having an overhead that is “too lean” to effectively run the organization. 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.

• Blue Avocado, its publisher, and affiliated organizations are not liable for website visitors’ use of the content on Blue Avocado nor for visitors’ decisions about using the Blue Avocado website.
• Throughout the year, you’ll be able to track which avenues are working best for you.
• With each reporting period, the organization compares actual performance against its plan.
• Rachel Grusin, Project Coordinator for the Legal Aid Society of San Diego, further explains that nonprofits can’t expect to slide in a line item without a clear explanation for why it belongs.
• Because nonprofit funding is often very flexible, it’s absolutely necessary to have many diverse revenue streams.
• Finally, your budget needs to establish a clear connection between the numbers and your goals.

Understand – and budget for – true program costs

• Our online business banking and money management platform allows nonprofits to open 20 individual checking accounts for program budgets, operating expenses, and beyond.
• This category includes things like educational materials, workshops, and conferences.
• Typically, this process should occur at least quarterly, if not more frequently, especially in the face of significant changes.
• You may see many nonprofits start as grassroots organizations, and at that stage it’s reasonable to use spreadsheets to plan budgets.

Mid-sized organizations (those with budgets of $500,000 to $5 million) make up one in five of all nonprofits registered with the IRS. Consider staff costs, professional services, technology investments, insurance, and office expenses. Customize your template based on your organization’s specific needs and reporting requirements. Regular performance reviews and cost-benefit analyses help optimize resource allocation and ensure each program advances your mission effectively.

Content Management System

A thoughtful budget is not restricted to being an operational tool, it’s a statement of accountability, a roadmap for growth, and a catalyst for change. “We get to help shape the leaders of tomorrow. I want that future to be The Key Benefits of Accounting Services for Nonprofit Organizations bright.” If you are looking for a more transparent and accountable budget, you may want to consider using a zero-based budget. This is a standard accounting report that shows how much was budgeted year to date compared to how much has actually been spent. If the structure or mission of your organization seems to share some things with them, that’s a good sign that you should apply.

It outlines the expected income and expenses for a specific period, often a fiscal year, and serves as a guiding light for fiscal responsibility. An effective operating budget ensures that nonprofits allocate their resources wisely, prioritize their activities, and stay on course toward their goals. Investing in a structured volunteer management program drives community engagement and ensures sustainability. This includes allocating resources for developing effective volunteer management programs and providing necessary training and resources. For instance, studies show that investing 5-10% of the total budget in volunteer development can improve volunteer retention by up to 20%. Moreover, tracking volunteer recruitment costs through accurate nonprofit cost analysis aids in maintaining financial transparency.

Build Out the Right Amount of Nonprofit Operating Reserves

Then you can advise your grant writers what areas need more (or less) funding so that grant prospecting is more efficient. Inputs, such as volunteer time and donated resources, and outputs, like the services delivered, must be continuously measured and assessed. This data not only informs budget adjustments but also aids in demonstrating impact and securing funding. Expanding on the budget details can show funders the story behind the numbers and the rationale for expenses, thereby making a compelling case for support. Use detailed historical data and consult with your nonprofit program managers to develop accurate estimates of expenses and stay on top of underestimating costs. Since different funding sources often come with specific restrictions, your budget should carefully allocate resources to cover each need effectively.