Maintaining a proper budget gives boards proper control. Having a good budget aids board directors as well. Good budgets assure donors that the nonprofit is actively overseeing the budget process. Donors want to know where their money will be going. Good budgeting demonstrates accountability and transparency, which are important issues that donors and grant-makers look for before offering funds. Technology is an important tool for responsible budgeting for nonprofits. With proper budget planning, nonprofits can easily reap the benefits of good budgeting. Revenue may not stream in as expected and large, unexpected expenses can creep up. Many unexpected things can happen that greatly impact the budget. Nonprofit budgets should be considered flexible documents. It’s crucial that the budget be centered around the primary goals and objectives of the organization. There are two parts to the budget - expenses and revenue. A nonprofit budget is a financial document that provides an overview of how the organization plans to spend its money. In both cases, a sound budget is important for financial sustainability and provides a guide for financial health and sustainability.Ī budget isn’t a prediction, a forecast, a target or a wish list. Managing a budget for a nonprofit organization is much like planning a household budget, except that there are generally more sources of income and more categories of expenses.
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