The Ultimate Guide to Nonprofit Budgets + 3 FREE Templates

Organizational Management June 29, 2022

WildApricot

By WildApricot

Running a nonprofit is a lot like learning to juggle—exciting as the skill is, it’s harder than it looks! If you’re looking for a way to keep all those balls in the air, nothing is more valuable than a foolproof nonprofit budget.


Having a budget makes all the difference when it comes to setting priorities for your organization’s future. But it’s natural to feel intimidated by a major financial document, especially if you’re a volunteer!


That’s why we’ve put together the ultimate guide to making your own nonprofit program budget — complete with THREE free nonprofit budget templates.


Let’s make this easy!

What is a Nonprofit Budget?

A nonprofit budget is essentially a financial document which lays out how your nonprofit is planning on spending its money. It’s not so much about setting goals as it is making a plan for how you’ll meet your goals.


Your budget will always include two things:

  • Sources of revenue

  • Operating expenses

 

Seeing these things side by side gives you the tools to decide how you can best use your resources. Your nonprofit budget is meant to be a flexible document that changes as your circumstances do. After all, sometimes you have a boost in revenue, or get hit with a pesky unexpected expense.

As your nonprofit evolves, your budget evolves with you!

What is an Operating Budget for a Nonprofit?

A nonprofit operating budget breaks down your annual projected expenses and revenue. This projection is based on:

  • Sources of funding

  • Anticipated operating expenses

  • General overhead


This is also sometimes called a “broad scope budget” or an “annual budget” because it gives you a full picture of what the coming year should look like. A nonprofit operating budget template can help you make sure you’ve hit all the bases.

Your operating budget shouldn’t be confused with your capital budget. A capital budget covers one-time expenses that will take years to fully fund, like major construction projects.

What is a Nonprofit Budget Template?

A nonprofit budget template is a fillable document that simplifies your budgeting. It should include some typical sources of revenue and expenses, which saves you time on listing everything out. If any of the sources don’t apply to you, you can just delete them—likewise, you can add anything that’s missing.

 

How you use this resource is up to you! You can keep all the information in one sheet, or break it up into different pages. A nonprofit budget template Excel creates is pretty similar to a nonprofit budget template Google Sheets does.

 

Different templates are made to help achieve different goals. We’ve included three different kinds for you: an annual budget template, a marketing budget template, and an event budget template.

 

If you’re still feeling uncertain, you can always get help from an experienced nonprofit accountant. They can look over your information and help you cut expenses, or offer fundraising tips to boost your revenue!

 

Benefits of an Ironclad Budget for Nonprofits

The time you put into building a thorough budget pays off big in the long run! It can help you:

  • Avoid overspending: Tracking your budget closely keeps you from spending more money than you actually have.

  • Plan out your projects for the year—and beyond: All of your decisions for future projects can be justified by your budget. You want to show that your ideas are possible!

  • Set SMARTer Goals: With the numbers in front of you, it’s easy to make your goals SMART (Specific, Measurable, Achievable, Relevant, and Time-Bound).

  • Better board communication: When you present your concerns and ideas to the board, a strong budget backs you up.

  • Get ready for future growth: Your budget teaches you about what you’ve achieved in this year—which sets foundations for success in years to come.

  • Ease your donor's minds: Donors want to know where their money is going, and your budget keeps everything transparent.

  • Make fewer mistakes: Running a nonprofit comes with a learning curve, but a good budget is what keeps you away from the mistakes that are truly costly!

Types of Budgets for Nonprofit Organizations

You might be surprised by how many types of budgets there are for nonprofit organizations! Here are a few of the best ones to know:

Annual Nonprofit Budget

Your annual nonprofit budget is a straightforward document with all of your projected expenses and revenue for the year. These numbers help guide your business choices—a sample nonprofit budget will show you what to include.

 

Nonprofit Project Budget

Every project needs a budget! A nonprofit project budget shows you what you have to gain without accidentally dipping into your operational expenses.

 

Nonprofit Cash Flow Projection

Your nonprofit cash flow projection highlights the most profitable times of the year. It shows you the safest times to spend, along with how much you need in the coffers to keep your organization running during the slower points in your year!

 

Grant Proposal Budget

Grants are the lifeblood of many nonprofit organizations. One key to writing strong grant applications is being clear about how you’ll use the funding you’re requesting.

 

Your grant proposal budget should:

  • Include an item-by-item expense breakdown

  • Be as accurate as possible, NOT a rough estimate

  • Add up to the total amount you’re requesting

 

A nonprofit grant proposal budget can help you find new places to put that funding!

 

Startup Operating Budget

If you’re just kicking off as a nonprofit, a startup operating budget is essential to getting you through those crucial first few months. It mostly relies on estimates at the start, but as you start seeing real numbers come in, you have a clear way to measure your success!

 

Nonprofit Marketing Budget

A budget is the essential companion to a nonprofit marketing plan. When you’ve got big marketing dreams, a financial breakdown will help you decide where you really want to allocate your resources.

Revenue & Expenses: What to Budget For

So you know that a budget needs to include your revenue and your expenses—but what does that actually entail?

Revenue

Put simply, revenue is the money you bring in from normal business operations. For nonprofits, that covers a lot of ground! Because nonprofit funding is often very flexible, it’s absolutely necessary to have many diverse revenue streams.

 

Nonprofit sources of revenue typically include:

 

  • Member Dues & Fees: Being a member of your organization should function like a subscription service. Dues and fees are a part of a nonprofit’s baseline revenue.

  • Events: Whether it’s ticket sales or exclusive VIP packages, a well-planned event can bring in good money along with energy for your cause.

  • Merchandise: An online store is the perfect place for your branded merchandise. You can also partner with a brick-and-mortar storefront or sell merch at your events!

  • Donations (Individual & Recurring): Even the smallest donations add up over time. Turning your individual donors into recurring donors gives this revenue stream greater consistency over the years.

  • Major Gifts: Major gifts are often connected to completing a special project, and come at a level that helps you blast through a fundraising goal.

  • Corporate Giving: Corporations often turn to philanthropy to fulfill their corporate social responsibility. Reach out to the right businesses about your mission, and you can see a big boost in revenue.

  • Sponsorships: In exchange for brand exposure, your sponsors can cover some costs for you. Don’t be afraid to get specific with your needs—plenty of partners will show interest in sponsoring things like accessibility tools (closed captioning, ASL interpreters, etc).

  • Cause Marketing: Not only does the for-profit business bring in money for your nonprofit, it also gives you access to its marketing capabilities. This means you can potentially reach a greater audience of donors!

  • Peer to Peer Fundraising: Birthday fundraisers, bake sales, runs for charity—this form of revenue comes with a personal touch, and lets your supporters get creative.

  • Crowdfunding: Platforms like Kickstarter or GoFundMe spread the word about your fundraiser fast. Your initial goals (and stretch goals!) can be measured against your actual success in your budget.

  • Grants: There are a lot of grant opportunities out there, and appealing to the granting bodies that best fit your cause is a must-do. Consider hiring a grant writer if your plate is already full. 

  • Loans and Program-Related Investments: Unlike grants, PRIs eventually require repayment. When you’re working on your budget, be sure to note when these loans move from revenue to expense!

  • Program Income: Revenue you bring in through special programs such as workshops should also be included in your budget.

  • Miscellaneous Revenue: If your nonprofit is bringing in money from any other sources, you should still be sure to note it! A full picture helps you budget most effectively.

Expenses

Expenses cover anything that costs your nonprofit money. They can be one time, recurring, or anything in between—if it costs you, then it’s an expense! The closer to accurate you can get documenting your expenses, the easier it’ll be to stick to your budget.

Some typical nonprofit expenses include:


  • Salaries & Benefits

  • Consultant fees

  • Insurance

  • Professional Development

  • Travel/Transportation

  • Office Fees

    • Rent

    • Office supplies

    • Repairs/Maintenance

    • Furnishing and Appliances

  • Utilities

    • Phone

    • Internet

    • Electricity

    • Gas

    • Water

  • Marketing & Advertising

  • Merchandise

  • Program Expenses

  • In Kind (Some grants might need to know the expense valuation of the in kind work you do. Here’s how you can calculate the value!)

Nonprofit Budget Templates: 3 to use NOW in Google Sheets or Excel

If you’re looking for a nonprofit budget example, we’ve got three different options for you:

Annual Budget

As a reminder, your annual budget covers all of your revenue and expenses for the year. If you need to estimate, go a little high on expenses and a little low on revenue. This will make it easier to not end up over budget!

 

Download This Template

Marketing Budget

Break down your marketing strategies by category. Throughout the year, you’ll be able to track which avenues are working best for you.

 

Download This Template

Event Budget

When it comes to planning an event, executing it successfully depends on how prepared you are! A budget helps make the event special without overspending.

 

Download This Template

12 Steps to Creating a Best Practice Nonprofit Budget

When putting together your nonprofit budget, you want to make sure that you’re setting up your organization for long-term success!


Here are twelve best practices to make your budget work for you:

1. Choose Who's Involved

Get multiple sets of eyes on your budget. Consider who’s available to give you the most useful insight—is there an experienced head of finance supporting you, or a treasurer? Or are you going in as a volunteer? Do your board members have any experience or connections to help? Checking in with multiple departments will help you better understand the big picture.


Consult with your nonprofit’s “experts” whenever you can, and if those aren’t available to you, consider running your numbers by an accountant!

2. Understand Your Organization's Goals

Remember: your budget is the tool which makes your goals into a reality. If you don’t know what those goals are, it’s hard to know what exactly you’re budgeting for! Before you get into the hard numbers, get clear on where you’d like to take your mission in the future.


One tip for goal-setting is to look beyond what you want for this year. Annual goals are absolutely necessary, but open yourself up to what could be possible five years from now. You’ll thank yourself later for having worked towards a long-term plan from the start.

3. Define Where Your Board Wants to Be Involved

Your board of directors will see your budget at some point, but it’s important to know how involved they’ll be! A board can either be very hands-on or hands-off, depending on how you want to use them as a resource.


When it comes to your budget, determine if your board will:


  • Make decisions about money allocation

  • Offer cash flow projections

  • Formally approve the budget

  • Review the budget and plan for action


Set expectations early on so you can use your board of directors as a quality resource!

4. Create Supplier + Partner Relationships, and Set Costs

Creating lasting relationships with your suppliers and partners will save you time, energy, and even money! Reaching out and forming new connections takes a great deal of effort. The better relationships you build early on, the easier things will be in coming years.


Once your costs are set, you know precisely what numbers you can expect to work with. Making a budget is a whole lot easier when you’re not relying on guesswork.

5. Identify All of your Expenses (that you can!)

A list is going to be your best friend here! Write down every possible expense you can think of, and then ask around to see what you’ve missed. Everyone in your nonprofit will have different expertise, so check in on what they might know that you don’t.


Gathering this information will be a whole lot easier with some accounting software. Look into some tools that make it easier to track your finances!

6. Decide Which Grants You'll Apply For

Be thorough as you research the grants that are out there! The key to receiving grants—besides writing them well!—is knowing which grants to apply to. Get an idea of who the granting bodies are, who they typically choose to support, and how much funding they have to offer.


One thing you can do is check out some of the past recipients. If the structure or mission of your organization seems to share some things with them, that’s a good sign that you should apply.

7. Define your Nonprofit's Revenue Streams

Be clear about all the places money is coming in from. Donations, fundraising, grants—each revenue stream has its perks and quirks! Getting an idea of what these streams bring in will help you see how useful each of them are to your organization long-term.

8. Figure Out Your Cash Flow Projection

Cash flow refers to the monthly movement of money coming in and out of your organization. Tracking this number tells you how much you have in the bank at any given time. This information is hugely important, because it shows you the best (and safest!) times to spend.


Be sure to get some help from your board with cash flow projection!

9. Pay Attention to All Your Budgets (eg. Marketing vs. Operating vs. Project budgets)

Every budget has a different use, but they’re all here for the same reason: to help you understand your finances. When you put all of these budgets side by side, they tell the story of your nonprofit’s year from several different angles.


Using the budgets, you can determine where you’re losing and earning the most. From there, you can troubleshoot and make the changes you need.

10. Simplify—Don't Overwhelm!

Your budget is full of a lot of information, but it doesn’t have to be overwhelming. Go one category at a time, and don’t panic about getting overly detailed. You want your budget to be a useful tool, not something you’re too intimidated to look at.


At the end of the day, your budget is meant to make your life easier, not harder. If looking at it makes your head spin, then it’s worth simplifying! (You can always bring in a bookkeeper to do the complicated stuff—the hours saved are well worth the cost.)

11. Keep on Top of the Numbers (eg. monitoring)

Remember that your budget is a living document. Situations change, and so do your projected numbers! Regularly monitor how aligned your projected budget is with what you’re actually experiencing, and make tweaks as you need to.

12. Create a Replicable Process

No matter what happens with your nonprofit, you never stop needing a budget! Set up your budget so it’s as simple as filling in the blanks come next year. Do what you can to structure your budgets similarly over the years—this will make it easier to compare them side by side as you track your growth.

9 Nonprofit Financial + Budgeting Software to Consider

Gone are the days where finances need to be tracked on pen and paper! Investing in some nonprofit budget software will make keeping up with your budget a breeze.


Here are our recommended options:

1. WildApricot

WildApricot is an affordable cloud-based software for small associations, non-profits, state and local chapter organizations. Manage membership, donations, accept payments, host your website, and run events.

30-Day Free Trial.


2. QuickBooks

QuickBooks Online is a small business accounting software and app that allows you to manage your business anywhere, anytime.


3. Sage

Sage Business Cloud Accounting (formerly Sage One) is an online accounting software that gives you anytime, anywhere access to the most important small business essentials. £12/month.


4. Blackbaud Financial Edge NXT

Blackbaud Financial Edge NXT®️ delivers intuitive cloud fund accounting software designed specifically to meet the needs of nonprofits and tax-exempt organizations.


5. Uncommon Good

Nonprofit fundraising, donor management, marketing, operations, community and project management, social media, branding, graphic design, website production. 30-Day Free Trial, $24.99/month.


6. Aplos

Software designed for nonprofits and churches with fund accounting, donor management, giving tracking, reporting, and more. 15-Day Free Trial, $79/month.


7. Araize FastFund Software Suite

Full Suite of Accounting, Payroll and Fund Raising and Fund Accounting applications for nonprofit organizations. $35/month.


8. Xero

Award-winning online accounting software designed for small business owners and accountants. $5.50/month.


9. NonprofitPlus

Manage Grants from award to expiration. Flexible reimbursement process with revenue recognition. Budget checking on every data entry screen to protect from overspending. $675/month.


Making a Budget that Works for You

As you take the time to fill in all these numbers, remember why you're building a budget in the first place. This document will be an invaluable tool in planning for your organization’s future. Work with your template, collaborate with your team, and get excited—this project will help the future look bright!

 






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