Budgeting for Nonprofits

SEO is achieved through optimizations to your website as well as growth content strategies (such as blogging strategies). While no two nonprofits are exactly alike, there are some best practices that all organizations should use when building their annual operating budgets. You can simplify the process—incorporating best practices, adapting to your organization’s needs, and making budgeting easier to manage—with Sage cloud-based financial planning and budgeting software. A well-structured nonprofit budget aligns expected financial resources with your organization’s mission and goals, ensuring financial sustainability while maximizing project impact. See how this professional budgeting software can transform your nonprofit’s financial management and help you better serve your mission. We look forward to partnering with you on your journey to financial excellence.

Building a Grant Writing Toolkit for Your Organization

• A percentage higher than this might indicate spending that’s disproportionate to the amount of money a group can raise.
• The budget should include realistic revenue projections based on historical data and current fundraising capacity.
• Each program might require unique inputs, specialized technology expenses in nonprofits, or volunteer recruitment costs.
• Your board members should have a direct role in developing cash flow projections, agreeing on the assumptions to use, and reviewing the projections carefully.
• Many foundations and most government agencies will have detailed rules about what can and cannot be included in a proposal budget.
• If you want to hire a new marketing director, you can look up salary trends to discover how much you need to pay them.

Also, because certain grants will be restricted to certain program areas (rather than general operating support), organize the budget so that each program area’s cost is easy to eyeball. Then you can advise your grant writers what areas need more (or less) funding so that grant prospecting is more efficient. Getting the right tools to help with research, reporting, and financial tracking will give your mission programs the support they need to grow healthily and stay resilient.

A Complete and Actionable Guide to Nonprofit Budgeting in 2025

• Modern accounting software can automate much of this monitoring process, saving time while improving accuracy.
• Determine cash flow projection when creating a nonprofit budget in order to ensure that there will be money available when needed.
• The nonprofit sector claims only 1% of the $730 billion spent annually on marketing in the USA.
• Given that a budget is a plan to earn and spend money throughout the year, the various people who make purchases and incur expenses should be involved in providing information to build the expense side of the budget.
• When creating a budget for a nonprofit organization, it is important to take into account all possible sources of revenue.
• Teach team members how to interpret this information and take advantage of the software’s reporting features to simplify their analysis.

Additionally, nonprofits can leverage the skills and expertise of their staff and volunteers to create and implement marketing and advertising campaigns in-house, reducing the need for outsourcing. This type of expenditure is integral to nonprofit cost analysis as it improves the organization’s overall resource allocation strategy. In fact, studies suggest that effective partnership strategies can enhance program efficiency by over 20% in some cases.

The 9 Essential Tips for Managing a Budget for Non-Profit Organizations

Ideally, salary allocations will be based on regular, reliable tracking of time. The data is already available for nonprofits that track time for grants and contracts. If that has not been your practice we urge you to gather some accurate information by completing a timekeeping report or adding time reporting to payroll or database records. We know from experience that allocating time based on general estimates or gut feeling is often inaccurate.

By creating a monthly cash flow, they can better predict their funding needs. ASF has one full-time fundraiser, and their salary falls under this category. Their program director and activities staff salaries and program budget are tracked in program expenses. There is a misconception in the nonprofit space that healthy and good nonprofits have low administrative and fundraising costs, and spend the majority of their funding on program costs. As a startup nonprofit, you’re already aware that you have initial expenses before you have your real operational expenses. These startup expenses might include the costs involved in crowdfunding, or what you’re hoping the crowdfunding will cover.

When in doubt, please consult your lawyer tax, or compliance professional for counsel. Sage makes no representations or warranties of any kind, express or implied, about the completeness or accuracy of this article and related content. Such tools centralize data storage and manipulation, eliminating the need to copy or download documents, and adding a layer of security. An assessment of your readiness should therefore also consider the external factors and trends shaping the current context, as well as past performance of your programs. Finally, a realistic timeline for budget preparation should be established, 5 Main Benefits of Accounting Services for Nonprofit Organizations ensuring enough time for review and adjustments before final approval. It’s also quicker to implement and help senior leaders stay on top of the organization’s resource allocation.

• Utilizing technology for efficient resource management is another effective strategy.
• Nonprofits should spend somewhere between 5 and 15% of their overall budget on marketing.
• Having extra cash can help stabilize your nonprofit and absorb an unexpected delay in receiving funds, a shortfall in revenue for a special event, or unbudgeted expenses.
• Many Executive Directors spend a substantial amount of time working directly in programs.
• Once you’ve settled on which tactics are most important to reaching your marketing goals, you can start to craft your best marketing budget.
• Our online business banking and money management platform allows nonprofits to open 20 individual checking accounts for program budgets, operating expenses, and beyond.
• Managing nonprofit organization expenses means addressing detailed cost considerations that secure the effective delivery of services to underprivileged communities while ensuring financial transparency.

However, the budget should be high-level enough so as to not be cluttered and overwhelming. While there will inevitably be some assumptions in your budget, try to work with real numbers as much as possible. Use last year’s numbers as a starting place and include any quotes from vendors or partners. Spend a half hour or an hour today or block off some time on your calendar to assess your budget.

Hubspot even offers a selection of free CRM software services so you can test them out before committing to a paid subscription. However — and I can’t caution this enough — avoid the temptation to over-project gifts, especially from new or newer donors. These articles and related content is the property of The Sage Group plc or its contractors or its licensors (“Sage”). Please do not copy, reproduce, modify, distribute or disburse without express consent from Sage.These articles and related content is provided as a general guidance for informational purposes only. These articles https://greatercollinwood.org/main-benefits-of-accounting-services-for-nonprofit-organizations/ and related content is not a substitute for the guidance of a lawyer (and especially for questions related to GDPR), tax, or compliance professional.

How can Chief Executive Officer (CEO), Non-Profit Organizations increase their salary?

Look for software that offers customization to match your organization’s unique needs, integration with other financial tools, a user-friendly interface, robust reporting capabilities, and secure data protection. Include all sources of income such as donations, grants, fundraising events, and any other revenue streams. It’s important to be realistic and conservative in your estimates to avoid over-optimistic projections.