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Thinking of Starting a Non-Profit? Learn How to Budget

Creating a budget for your non-profit organization might seem overwhelming, especially if you are new to non-profit management or have never gone through a budgeting process. Even though the idea may seem daunting, creating an annual budget for your non-profit is essential to maintaining control of the organization's finances. Every non-profit budgeting situation will be different, but there are some key aspects that you will need to include in your annual budgeting plan.

Organizing the Budget
Begin by figuring out what your fiscal year will be. You might follow the calendar, beginning your fiscal year on January 1. If your funding comes from the state or federal government, you might follow their calendars, which often start on July 1 or another date.

Setting a Budget
Your budget will include several different categories. One of these categories will be projected expenses. You will need to make realistic estimates of costs such as rent, utilities, professional services, office supplies, salaries and equipment. Another category is projected income. This is where your funding comes from. Include both concrete and variable funding sources, such as grants and fundraisers. If you will allocate particular funding sources to particular expenses, you may need to have sub-categories of your budget in order to keep close track of their interactions.

How to Stick With a Budget
Sticking with your non-profit's budget means keeping it up-to-date. You will need to enter expenses and income into the budget as you receive them. If your funding sources stipulated restrictions such as only using a particular funding line to pay for office supplies, make sure you stick with those budgetary requirements. As the fiscal year goes on, update your budget with actual expenses in place of your estimates. This allows you to adjust discretionary items or seek additional funding sources if your required expenses were higher than you anticipated.

Professional Budgeting Guidance
If making and following a budget stymies you, consider seeking out professional guidance. Many accountants offer workshops for non-profit managers at a low or no-cost. There are also local, state and national advocacy groups for non-profit organizations and small businesses that may offer training and educational programs for budgeting. Even a few hours with an experienced non-profit accountant can help you with critical budgeting aspects such as staying organized and making sure that you follow the tax codes in order to maintain your non-profit status.

Full post as published by The Mighty Argos on September 19, 2016 (boomark / email).