Does your nonprofit need to budget?
Yes, and here’s why. The budget provides a framework for organizational decision-making. Developing a budget helps your board make choices between projects. Using it helps to maintain focus on what’s most important to your group. They help set expectations for an organization, tell us what we expect to achieve, and give us something to measure against.
A simple nonprofit budgeting process
1. Start with the vision.
When board members and committee chairpersons participate in the budgeting process that affects the areas for which they will later be responsible, they are much more likely to take ownership and try to make things work. The budgeting process is a great way to unite your organization and collectively focus on your vision and goals.
2. Then the goals.
Once you establish your vision, identify your administrative expenses and the services you want to provide. Once you identify those costs, you can determine how much money you need to raise.
3. Leave some wiggle room.
You cannot foresee every possible eventuality. Make sure you have some wiggle room in your budget for unanticipated expenses. Stuff happens. Be prepared.
4. I need to raise how much?!
Now that you have an idea of how much the services you want to provide will cost, you can start brainstorming ways to raise the money to provide said services. Be sure to take into account the money in your bank account that is available from the prior year and the amount of money that you want to leave in the kitty for next year.
Our free guide can help you learn more about budgeting. MoneyMinder also has tools to support this effort. Try it free for 30 days.