Budgets sure aren’t exciting to create, but they are a necessary tool—especially for a nonprofit. In this article you will learn 7 nonprofit templates to help you streamline and simplify your budget-creation process. Let's get started.
Who is this template for?
This template is for all nonprofit organizations.
What are the main sections covered in this template?
The main sections include revenue, expenses, assets, liabilities, and net asseets.
Budgets sure aren’t exciting to create, but they are a necessary tool—especially for a nonprofit. From grant budgets and organizational budgets to program budgets and more, it’s easy to become overwhelmed.
With all those different types of budget forms needed, it can be a big help to have some nonprofit budget templates on hand. So that’s why we’ve put together a list of 7 nonprofit budget templates to help you streamline and simplify your budget-creation process.
Let’s jump in.
Why You Need a Nonprofit Budget
Every nonprofit needs a budget. It creates your organization’s financial roadmap for the year.
A nonprofit budget makes it easy for you to zero in on how much money you’ll need to raise during your fiscal year while also allowing you to assess your organization’s financial health.
Budgets are also essential for tracking and predicting program expenses and providing insight into whether or not you can afford costs like new hires or upgrading your technology.
And when you think about grants (we do that a lot here at Instrumentl!), it’s true that many funders often require you to provide grant budgets in your applications. Understanding the ins and outs of budget creation and having an organizational budget in place makes it easy to show the funder exactly where their funding will be allocated and how it will be utilized for the greatest impact.
Types of Budgets to Consider
There are several types of budgets commonly used by nonprofits. Let’s take a look at each type of budget and its use.
Operating (Organizational) Budget
A nonprofit operating budget a.k.a. an annual budget is a board-approved document that tracks all expenses and revenue of the nonprofit as a whole.
An organizational budget provides an important roadmap for each fiscal year and it acts as a touchstone on which to monitor an organization’s fiscal health.
A proposed operating budget is prepared by your organization’s staff, but then needs approval by your board of directors. After all, the board’s main responsibility is financial oversight or serving as a fiduciary.
When preparing your organizational budget for the board’s review, remember that the term “nonprofit” refers to your organization’s tax status. It doesn’t mean that you should have a break-even budget or show a budget that’s in the red.
Too many nonprofits operate with an attitude of scarcity because they assume that’s what their donors (including funders) want. However, if you are operating in the black, then you’re not only fulfilling your mission, but you’re also enhancing your financial health.
If your nonprofit operates a handful of programs, you definitely need some program budgets.
Each program’s manager can develop their respective program’s budget and then turn it in to your executive director for approval. These become part of the overall organizational budget and are used to evaluate the program’s financial effectiveness. Program budgets also create a paper trail of accountability, enhancing a nonprofit’s financial transparency.
However, a small nonprofit may only have one program, and that’s the one exception when no program budget is needed. Simply include the program’s expenses in the overall operating budget.
Engaging in a capital campaign takes time and money. Obviously such an undertaking deserves its own separate budget. You’ll want to include campaign expenses, such as consulting fees, travel, printing, web upgrades, events, and donor recognition in the campaign budget.
Try to keep campaign expenses around 10% of the overall campaign goal. Be sure to spread those costs out over however long your campaign will run (typically three to five years.)
Grant Proposal Budget
If you’re preparing a grant proposal to help fund one of your nonprofit’s programs, you’ll need to create a grant proposal budget. A grant proposal budget lists all the costs of running the proposed program, including supplies, equipment, marketing, and more.
When seeking funding for a program or project, you’ll need to separate out direct expenses (expenses that are 100% related to project/program delivery) and indirect expenses.
If your proposal is to support general operating expenses, it’s likely you’ll only need to include your nonprofit’s operating budget.
Depending on the funder’s budgetary requirements, you’ll have to adapt your grant proposal budget to their preferences.
Most funders also ask for a grant proposal budget narrative to accompany the budget itself. A narrative explains what each line item consists of. Here’s a freebie! An excellent example of an effective budget narrative is offered by the Rose Community Foundation in Denver, CO.
Cash Flow Projection
While not specifically a budget, a cash flow projection can help keep your nonprofit on track financially.
A cash flow projection is a month-by-month estimate of expected revenues and expenses flowing in and out of your organization. By creating a cash flow projection, your nonprofit won’t be taken by surprise if revenue goes down. It can also help show you what times of the year you may experience a cash shortage, helping you plan ahead more strategically.
Statement of Financial Position
Also known as a balance sheet, a statement of financial position is an excellent financial tool. You’ll find this is an often-required attachment to grant proposals since it gives a snapshot of your nonprofit’s fiscal health.
A statement of financial position compares your organization’s short- and long-term assets to its liabilities. Short-term assets include cash or checking accounts, while long-term assets include property, equipment, and investments.
Similarly, short-term liabilities could be accounts payable to vendors, with long-term liabilities encompassing something like a mortgage or a bank loan.
Three Things You Shouldn't Miss in Your Nonprofit Budget
No matter if you’re creating your budget in a spreadsheet, in accounting software, or using the nonprofit budget templates in this article, make sure to include the following in your operational budget:
Revenue is income that flows into your nonprofit. Here are some typical nonprofit revenue sources:
Bequests (estate gifts) or other planned giving instruments
Interest from investments
Fees for goods and services (think ticket sales or merch)
Expenses for a nonprofit can fall into several categories. These include:
Functional costs (also known as program expenses). Examples of program or functional costs could include IT expenses, advertising, or supplies used specifically for program delivery.
Operational costs (overhead). These costs include staff salaries, rent, utilities, and the like.
Administrative costs. Administrative costs can include accountant’s fees, legal fees, and other expenses you may outsource.
Development costs. In a nutshell, development expenses are the costs of raising money for your organization. These can include printing, special events, donor cultivation, donor recognition, or a fundraising consultant or outsourced grant writer.
3. Assets and Liabilities
Funders want to understand that your nonprofit is functional and financially healthy. That’s why assets and liabilities should be broken down and listed in any nonprofit organizational budget.
Assets are pretty simple: anything your nonprofit owns. For instance, does your organization own its facilities outright? If so, that’s an asset. Do you have an endowment? That’s also an asset. Furnishings, equipment, and other things owned by the nonprofit are all considered to be assets. So is merchandise you may sell to create additional revenue.
Liabilities, on the other hand, are anything your nonprofit owes. Often, liabilities are accounts receivable, or bills your nonprofit needs to pay. That can include a mortgage loan, a vehicle loan, or other lines of credits.
Typically funders want to see few if any liabilities because they don’t want to give money to pay off debt.
A Step-By-Step Guide to Creating Your Nonprofit’s Annual Budget
Building a budget can be complex, but by following a sequential plan, you’ll find creating a nonprofit budget isn’t as daunting as you might have thought.
Assemble Your Budget Team
Your budget team should include your chief financial officer, your executive director, and your program heads to provide input. You may also wish to include your board’s treasurer who can provide additional valuable insight.
Set a Timeline and Goals
Once you have your team in place, determine the goals for your budget. Make sure everyone on the team understands and buys into both your programmatic and financial goals and that those goals are aligned.
Next, decide on your budget timeline. Identify the date that you want your budget to be completed by and work backwards from then to begin to set deadlines and a work plan for the budget. It’s typical for the entire budgetary process to take up to six months.
Choose a Nonprofit Budget Template
While you can create your budget from scratch, there are plenty of free templates available you can use to streamline the process. Choose a template that works for your organization and its specific needs (we’ve included a few templates in the next section).
Make sure that everyone involved in the process is on the same page and has access to the same budget template.
Calculate Expected Revenue
Start filling in your budget template with your expected annual revenue.
Figure out how much money will be coming in and from where—looking at last fiscal year’s budget (if you have one) can help. As a general rule, keep your revenue numbers on the conservative side. Better to underpromise and over perform.
Once you have a good idea of how much money will be coming in, you can then budget for expenses, or how much money will be going out. This is a good time to consider pay increases or capital needs such as upgraded technology.
And don’t forget to plan for the unexpected. If we’ve learned anything from the COVID-19 pandemic, it’s that the unexpected can happen. Make sure you’ve built enough financial cushion into your annual budget to handle surprises.
Present Your Budget to the Board for Approval
Once you have completed your budget, you should present it to your nonprofit’s board for approval. This is another reason why it’s helpful to have a member of the board be part of the budgeting team.
If the board has feedback (or pushback), you will likely need to incorporate those changes into a second draft and re-present the budget for approval.
Continue to Monitor
Monitoring your expenses and revenue is an ongoing process. Make sure each department is doing so and if issues arise, to notify management before something becomes a crisis.
7 Budget Templates for Your Nonprofit
We’ve rustled up several examples of great nonprofit budget templates for your use as you embark on your fiscal planning journey.
Operating Budget Template
The good people at the Wallace Foundation offer a comprehensive, free template to create a nonprofit operating budget.
There are even detailed instructions about how to use all the features of the template which includes multiple sheets and self-calculating formulas. This template is a little work of art.
Program Budget Template
Smartsheet offers an array of nonprofit budget templates, including this program budget template. It’s free and you can download it in Excel, Word, Google Docs or PDF versions. We like that it shows details for both income and expenses month by month.
Campaign Budget Template
While not a template per se, The Canada Council for the Arts offers a great example of a capital campaign budget for a $10 million campaign.
Expenses include the campaign planning phase with a consultant, the feasibility study, the feasibility report, and the resulting campaign plan.
Quiet phase expenses can include architectural design, construction expenses, additional personnel, wealth screening and analysis, consulting fees, travel (to meet with donors), furnishings, fixtures, and equipment (FF&E), and more.
The public phase often includes a public kick-off event and a final celebratory gala. Other public phase expenses can include donor recognition, campaign swag, mileage, and more. Build your own spreadsheet using the Council’s guidance.
Grant Budget Template
The University of Louisville’s School of Medicine offers an outstanding nonprofit budget template as part of its internal basic grant program. This fillable template shows the various line items that most nonprofit grant budgets should contain.
Bonus: Another Grant Budget Template
The Council of Michigan Foundations provides a common grant application package, along with a budget template. This downloadable resource is a good example of a thorough grant budget, showing the total expenses as well as the amount requested from a foundation.
Cash Flow Projection Template
The Nonprofit Finance Fund provides a useful template to build out an annual cash flow projection month by month. Use this template to see your projected revenues and expenses throughout the year.
Statement of Financial Position Template
If you’re ready to tackle a statement of financial position on your own, head on over to 365 Financial Analyst and download their free Excel template. The Bulgarian-based company offers finance courses online and an array of resources such as this template.
If you want even more examples of budget templates, check out this post.
Wrapping Up: Nonprofit Budget Templates
Every nonprofit organization needs an annual operating budget. While it can be intimidating at first, creating a budget can be simple with the right resources and input from your team.
We hope that the budget templates and tips in this post will help you create a successful budget for your organization. After all, our team at Instrumentl is all about nonprofit success. To your financial health!
With the right tools, nonprofits can quickly scale fundraising and programming and take back their time. But, what makes something the “best” tool? And how do you justify an additional expense in a resource-constrained organization? Download this guide to learn more.