Recurring costs, such as inventory purchases, must be covered before indirect ones, such as office supplies, salaries of employees, and rent. The total amount should not exceed the total accumulated income of the non-profit organization. The use of budget worksheets will aid in tracking the income and the expenses of the organization, along with setting aside contingency funds for unexpected and uncontrollable circumstances. Budget projections for both the income and the expenses must be achievable. Past financial performances and budgets may be helpful in the creation of the current one.

Define your Nonprofit’s Revenue Streams

The data is already available for nonprofits that track time for grants and contracts. If that has not been your practice we urge you to gather some accurate information by completing a timekeeping report or adding time reporting to payroll or database records. We know from experience that allocating time based on general estimates or gut feeling is often inaccurate. The goal of program-based budgets and allocations is to gain a solid understanding of the true costs, and staff cost is too important to leave to guesswork. Calculating and analyzing the true cost of programs and activities can be completed as a one-time project or implemented as an ongoing management practice, as we recommend. If that is the goal, it’s worthwhile to make sure that the program and cost definitions match the setup of your accounting system.

Free operating budget template for nonprofits

When your organization is not in line with the budget, you should look at “why,” and what factors you can control or change. This is where the budget becomes an effective management and operations tool for your organization. This allows for a better overview, more speedy addressing of any potential issues, more nimble management of the staff and volunteers, and a more informed everyday decision-making process. Your annual unrestricted surplus should be sufficient to meet debt obligations, fund depreciation, and add to operating reserves. AAFCPAs recommends a 3-5% surplus operating budget each year, and four to six months of expenses in your operating reserves.

Don’t forget about non-monetary contributions

No matter what the size of your business, having the budget plan will always help you have control over your expenses always. Even small and medium companies need a budget to keep their income and expenses on the check. You can check budget in Google Docs if you need to make a budget in the sample form of a document. The above non-profit budget template will be of great help to you if you plan on creating the right budget for your organization. A budget plan helps you plan and control the finances in your organization. There are many sample budget templates available for you so that you do not have to take the effort to create a simple budget for your nonprofit 5 Main Benefits of Accounting Services for Nonprofit Organizations organization from scratch and waste a lot of time.

But even with these staggering numbers, many nonprofits—particularly small- to mid-sized organizations—are still underfunded. The Relay Visa Debit Card is issued by Thread Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc. https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ and may be used anywhere Visa cards are accepted. The Relay Visa Credit Card is issued by Thread Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc and may be used everywhere Visa cards are accepted.

• Total up your professional support costs for accounting, legal advice, grant writing, human resources, and more.
• As you start developing your nonprofit budget, download this budget for nonprofit organizations sample to ensure you include all the essential sections and don’t overlook any crucial details.
• A well-organized nonprofit budget makes all the difference in your effort to align financial resources with your mission.
• A well-crafted nonprofit budget ensures financial sustainability, supports strategic decision-making, and fosters transparency with donors, stakeholders, and the communities you serve.