Non-Profit Budget Process
A nonprofit organization may not bring in any money for profit, but that does not mean that the organization does not have money coming in for operational purposes.
A budget is needed for a nonprofit organization, as money is needed to establish and run programs, offer help and services to people in need and make a change in the community, which is often what nonprofit organizations aim for.
Planning the Budget
1. Before the nonprofit budget can be constructed, sit down with other workers within the organization and make a solid plan.
Identify the key workers who will be part of constructing the budget and who will be responsible for updating and operating the budget within the nonprofit organization.
Board members and committee members should be actively involved to ensure all of the organization’s needs are met.
Schedule budget meetings and any training meetings that need to take place during the budget construction process.
Communication
2. Communication is an important factor in constructing a budget, whether it is nonprofit or a for-profit organization. It is important that everyone knows the responsibilities and expectations that need to be addressed in the budget and process, including deadlines and financial figures.
For example, it is important that an employee can actively voice the amount being given by donors to help the operation of the nonprofit organization on a monthly basis.Goals and Objectives
3. Determine the goals of the nonprofit organization, including the help and services it will provide to people in need. Examine if the funding coming in to the organization is enough to pay teachers to offer educational programs to those in need, if additional schooling is one of the goals of the organization. The board of executives must agree on these goals and work toward fulfilling them with the donations and tools in hand.
Income and Construction
4. Calculate a complete income sum that the nonprofit organization has coming in at any given time. Construct the budget around this income and the fees required for the organization to offer programs and services.
Communicate actively with the workers who are developing the programs and services, so they know how much funding they have to offer the programs in question.
Balance Sheet
5. Create a functional balance sheet that outlines how and where the money going into the organization is coming from. Determine where it should go to help the goals of the organization best.
The balance sheet should also discuss how much the nonprofit organization has in liabilities and loans that should be paid off, so the organization can operate properly and meet the community goals it has set.