Like profit-oriented businesses,, a nonprofit organization must plan projects, the fiscal year, investments, and all other financial moves to work effectively. Like the first, nonprofit companies, such as foundations, plan the next period according to their specific budget to control expenses better and smartly conduct resources. 

Fortunately, these organizations often rely on a Non-Profit Budget Template to gain a deeper understanding of costs, expenses, earnings, and other factors that impact their growth potential. In the upcoming sections, we will provide comprehensive information about these valuable documents, enabling you to utilize the templates we provide with confidence and awareness.

A nonprofit budget is a financial document detailing all the organization's costs throughout the next fiscal year and how it plans to spend the money. A copy with these purposes breaks down all the company's annual projected expenses and revenue.

In other words, a nonprofit budget is a projection of what the organization expects to achieve in the next twelve months according to the funds and resources it has received from disinterested donors. 

This projection is based on the following:

• Sources of funding;

• Anticipated operating expenses;

• General overhead.

The main difference between a nonprofit budget and a capital budget is that the first only considers the organization's planned activities because its funding is more static than the latter. Conversely, a capital budget includes running projects that have ongoing effects on the organization's economy. 

In this sense, a good budget for capital enterprises considers ups and downs and forecasts all the possible scenarios in the short, medium, and long term. A nonprofit corporation shows how much revenue it expects to receive from institutions and donors to calculate what is possible to be determined in the following period. 

Forming a budget correctly makes things easier since you can manage general expenses and costs with a better understanding. Other benefits include the following:

• It helps you to focus on strategic goals. Things you can do within your nonprofit organization are strictly related to the quantity, availability, and timing of funds you receive. In this sense, you must plan your budget strategically for the following months. Thanks to this, you can focus on short and medium-term strategic objectives.  

• It helps you to keep donors up to date. While it is true that many donors generously contribute funds without concerning themselves with the specific allocation, some take a keen interest in your organization's financial management. These individuals base their decisions on whether to continue supporting your cause or withhold their donations. Therefore, it is crucial to prioritize transparent financial practices and demonstrate responsible stewardship of funds to instill confidence and maintain the trust of all donors.

• Avoid overspending. Every nonprofit business should monitor how much its operations and activities cost. A nonprofit’s budget prevents them from increasing direct costs and spending more money than they have. 

• Keep board members informed. Holding meetings where the annual budget is discussed without agreement can be highly unproductive. By presenting an accurate nonprofit budget, you can clearly communicate to board members the areas requiring resource allocation and identify those not yielding satisfactory results.  This action saves time as well as giving support and feedback. 

• Make fewer mistakes. Most of the time, budgeting considers multiple factors and includes many details. Moreover, operations may result in being more expensive than you thought. A well-achieved budgeting process keeps you away from unforced errors in your budget plan. 

• Prepare stakeholders for future growth. From a certain point of view, nonprofit budgets are financial reports that provide relevant information about your organization’s efficiency. Good reports will set the foundations for future and better fundraising campaigns and donor management.  

Regardless of the several existing types of budgets, we consider it relevant to mention the five most common types together with a short description.

• Annual nonprofit budget. This corresponds to the most common type of nonprofit budgeting report since it contains detailed yearly expenses and revenue information. It’s crucial for cash flow projections and calculating an accurate and reasonable budget for the next period. 

• Nonprofit Project Budget. This is similar to the annual budget but directed to a specific project or period, for instance, one month. It shows you how much money you need to receive for donations to complete the project successfully.

• Grant Proposal Budget. Grants are other ways of financing nonprofit organizations as long as your organization shows how it will use the funding. Still, since governments or public organizations give grants, your budget should describe the following in terms of real numbers:

  • Item-by-item expense breakdown.

  • Provide accurate information; there is no space for rough estimations.

  • Present a calculation of the total budgets you’re requesting.  

• Startup operating budget. Whether an experimented nonprofit organization or a startup just kicking off in this world, all corporations need to perform a startup operating budget to pass through the first crucial months. 

• Nonprofit Cash Flow Projection. This document showcases the most profitable months of the year and the worst-case scenarios for many nonprofits. By projecting cash flow, you can make informed decisions about when it is beneficial to allocate funds and when it is more prudent to conserve resources, thus ensuring the organization's smooth operation.

There are five primary sections that any nonprofit finance fund should consider when building its budget template, no matter if it’s an annual budget template or any other. 

Facilities Expenses

We assume your nonprofit organization has a physical location or office space. All expenses related to the facility should appear in the budget accounting. This item should include the rent, utilities, and maintenance.

Personnel Expenses

Creating a nonprofit budget includes keeping in mind employees' salaries or payroll, which usually correspond to the most significant expense. This item could be around 30 - 50% of your total budget. You should also include benefits, taxes, and appreciation, such as lunch and transportation.  

Administrative Costs

Administrative costs are all the money you pay to keep activities going. They cover a vast range of your total expenses. It involves software, technology, office supplies, electricity, Internet, printing, and postage. 

Marketing Expenses

Your nonprofit organization needs to promote its mission and communicate to donors, stakeholders, and other participants what its cause is. This is an essential step to get income, grants, and different types of financing. Then, you’ll need to use some part of your fund to pay for marketing campaigns, advertisers, and more. Include expenditures of this nature in your monthly budget report. 

Program Expenses

A program budget will ensure your nonprofit organization's current financial health since it considers all the expenses it needs to pay to carry out its mission. For instance, a budgeting process for programming may include courses, health care, housing, meals, inductions, art programs, recycling, and more. 

Free templates you’ll find here will help you create and edit nonprofit budgeting for your corporation. For better management and edition of these templates, we recommend using classic Microsoft applications, such as MS Excel and Word, which you can get using Microsoft Office 2021 Professional Plus Key Retail Global.   

Nonprofit Budget Template

Download it from Smartsheet.

This first nonprofit budget template is a spreadsheet document that integrates income and expenses sections to determine finances quickly. By default, this template contains predefined funds and costs. You can add the information you have to complete the budget soon. Besides, this template contemplates the twelve months of the year to have an overview of your income and expenses throughout the year. 

Nonprofit Operating Budget Template

Download it from Gdoc.io.

This basic budget template considers your budget for specific activities, tasks, and general items and the actual charges for each. This document remarks on the difference between both quantities and shows whether the balance is positive or negative. This way, at the bottom of the paper, you can calculate the general numbers of the current period and forecast possible costs for the coming year.

Nonprofit Grant Budget Template

Download it from Excelshe.

This nonprofit grant budget template addresses budgeting from a general perspective, considering total revenue and expenses in broad sections. In the upper section, you enter incomes regarding individual and corporate contributions, grants, and government. You can sum revenue to obtain the total budget for the period. Then you also insert expenses by item and subtract to determine if you have blue or red numbers.

Program-Based Budget Template

Download it from Wallacefoundation.

This template is designed for entering, controlling, and managing program budgets in a structured manner. This template contains a particular row for inserting staff and describing how many resources you allocate to each of them. This document considers personnel and non-personnel to calculate the total specific expenses for all programs running in the year. Besides, it includes a column indicating the specific budget for any item or employee. This way, you can know exactly what to expect from any investment in personnel development.  

A nonprofit organization may also fall into bankruptcy if its managers and administrators do not manage resources, revenue, fees, and expenditures well. Thanks to this ultimate guide and templates, these and other professionals can perform better budgeting and ensure the continuation of operations and success.   

As correctly managing dollars, accepting volunteers, administrating sales, and other activities within your organization require appropriate tools, here on RoyalCDKeys, we’re giving you extra resources for those purposes. Please Navigate through our blog and check news and other articles for you!