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Nonprofit Budgeting Checklist

by Alex Acree
Checklist for Nonprofit Budgeting

A budget is essentially a plan for your expected income and expenses so you can prepare your organization for the future. Budgets can help nonprofits become financially sound and remain financially healthy. Your budget provides direction for your nonprofit so you can prioritize how to spend the revenue and donations you receive during your fiscal year. This checklist is a planning tool that can assist you with your organization’s financial management. It will help you decide what type of budget is best for your nonprofit as well as give you an idea of what information you should collect when creating a budget.

A Budgeting Checklist for Nonprofits

Click on the image to download a PDF version of the checklist.

Checklist when creating a nonprofit budget

Budgeting Process for Nonprofit Organizations

Gather Data for Your Nonprofit’s Budget 

As you go through this checklist for the budget process, we recommend collecting as much data as possible to gain a clear understanding of how certain expenses help you accomplish your nonprofit’s mission. This may include documents, reports, and other materials from the prior fiscal year (or years) as well as the current fiscal year.

Thinking through how those pieces of data fit together for overall financial management will also help you during the budget process. Putting all the pieces together will allow you to see the bigger picture of your organization’s finances alongside all the specific details.

Focus on Transparency

Businesses often have set financial goals that they are trying to achieve. Nonprofits may have organizational financial goals as well, such as establishing a rainy day fund. However, nonprofit organizations generally focus more on accountability than profitability, and one of the primary purposes of the budget—or plan—is financial transparency.

Part of stewarding your resources well is showing your donors and supporters how you are using what you’ve been given. But stewarding those resources does not mean your expense budget should remain at zero. It’s perfectly fine for your nonprofit to spend money to help achieve your mission and other strategic goals along the way, so don’t be afraid for your budget to reflect that necessity.

Know and Understand Your Reports

Who is going to review the reports for your nonprofit? Will it be you, your board, a bank, a grantor, etc.? What questions are they likely to ask about your organization’s finances, costs, resources, and cash flow? The reports you pull should be able to answer those questions, and that includes your budgeting reports. Anticipating these questions will also help when you need to request board approval for the final draft of your organization-wide budget.

Involve Those Who Are Involved

If certain staff members know all the details of what happens in a particular department, it helps to involve them in the budgeting process. Discuss their needs, wants, and annual goals, and identify how those things will impact their budget. Together, you can come up with a strategic plan that will help your staff members do their jobs better while also accomplishing overall organizational goals.

Staff members don’t need to make the final call as far as the amounts they receive for the organization’s programs or projects. But they may know the ins and outs of what’s needed better than a director or board member, which can help you be more thorough during the budget process.

Your Budget Is Unique to Your Nonprofit

Regardless of the information you choose to collect as you build your budget, remember that your budget is unique to your organization.

Certain items on this nonprofit budgeting checklist may not apply to all nonprofits, and that’s okay. There may be similarities with other organizations in the nonprofit sector, but your budget should reflect the needs of your organization and its mission. You may be able to start with a nonprofit budget template, but you will likely need to tweak it for your specific needs, and you may even be better off not using an existing template.

With Aplos, you can create your nonprofit’s budget right in the software, track your budget, and view your exact fund balances at any time. Watch a short demo to see how it can benefit your nonprofit. You can also try the software free for 15 days.

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