How do you write a budget for a nonprofit?


Quick Answer

The process for writing a budget for a nonprofit organization is similar to that of a traditional business, which includes setting the term of the budget, calculating expenses and estimating potential income. However, the nonprofit budget must also account for the needs of each department and program, and it requires you to allocate funds across different fields.

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Full Answer

Begin drafting the budget by making a list of all the individual departments or entities within the nonprofit organization, as each branch needs to have its own budget that factors into the organization's master budget. You also need to determine the date range for the budget; most budgets work on an annual or quarterly basis. Calculate the operating costs for each program, which may include payments to employees, the cost of materials and rent for operating space. Also factor in the proportional cost of using any shared resources throughout the organization, such as office space or electronic services.

Once you determine the cost of each department, record any revenue streams, such as local fundraising or fees, to find profits and the net cost of the department. Transfer these values to the master budget, which should include any available money from grants or donations to the organization as a whole. From here, you must allocate the funds accordingly to ensure each department is operational or make reductions to certain areas to keep costs down.

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