To create a budget for a nonprofit organization, first write down a budget process, decide which organization members should be involved and establish a timeline, notes Elizabeth Hamilton Foley for the GWSCPA Nonprofit Financial Accountability Task Force. Create the budget from detailed worksheets and offer a comparison between budgetary and actual numbers.Continue Reading
Putting the budget creation process in writing creates a tool by which progress toward completion can be measured, explains Foley. The budget should be approved by the board at least two months prior to the start of the fiscal year and the written process used to keep the timeline on track. The executive director of the nonprofit must be involved with the budget's creation.
Foley recommends including the staff members responsible for adhering to the budget in the process. Use detailed worksheets to calculate the numbers for each budget item. For example, a detailed personnel worksheet can be created to budget for the organization's payroll. This worksheet needs to include the annual salary of each paid position along with expenses, such as federal payroll taxes, state unemployment, workers' compensation and other expenses associated with payroll. Use the bottom line numbers from these worksheets to create the summary budget presented to the board.Learn more about Accounting