Creating a Nonprofit Operating Budget: 4 Best Practices

A proactive approach to financial management helps build resilience and flexibility to adapt to changes. The most important financial planning tool at your organization’s disposal is its annual operating budget. Jitasa’s nonprofit budgeting guide defines this resource as ‘a planning document used to predict expenses and allocate resources for your organization. Budgeting is the groundwork of any successful nonprofit organization.

Operating Budget

Consider segregating staff expenses as it usually comprises anywhere accounting services for nonprofit organizations from 60% to 90% of an organization’s budget. It’s also useful to look at the financial trends for your programs over the past few years, and assess if each program is covering its direct costs, or contributing to overhead. Make sure that you clearly determine the roles and decision-making processes that will yield the most effective information gathering, analysis, and decision making. Additionally, determine a timeline that ensures approval prior to the fiscal year-end.

• Getting Attention’s nonprofit marketing statistics reveal that it can take points of contact to reach a new donor (or, as Convergent Nonprofit Solutions refers to them, investors) for the first time.
• This not only helps create a more accurate and comprehensive budget but also ensures buy-in across the board.
• This rigorous approach ensures each dollar actively contributes to your nonprofit’s mission and helps eliminate legacy costs that no longer serve your current goals.
• Effective budgeting aligns financial resources with the mission and long-term objectives of the organization.
• The average small business using Google Ads spends between $5,000 and $12,000 per month on Google paid search campaigns.
• Budget assessments are critical and provide visibility into your organization’s financial performance.

What Does it Take to Create a Successful Business?

A not-for-profit’s (NFP) budget isn’t much different from its for-profit counterpart, but it requires perhaps more careful, detailed attention. The organization must remain compliant with all of the legal requirements for a tax-exempt entity while fulfilling its mission. By doing so, the organization could save 8-10 hours per week, enabling staff to dedicate more time to supporting survivors.

Bonus – Donorbox Free Webinar on Successful Budgeting & Forecasting for Nonprofits

The average small business using Google Ads spends between $5,000 and $12,000 per month on Google paid search campaigns. That’s $60,000 to $150,000 of marketing expenses per year spent solely on ad clicks. Thankfully, Google created a grant to help nonprofits budget for marketing. If your organization is fortunate enough to attract in-kind donations, record these contributions to abide by legal standards and create plans to thank specific donors.

• If your results indicate your organization is falling short of operational goals or on track to miss the year-end forecast, it’s time for a budget amendment.
• Blue Avocado provides space for the nonprofit sector to express new ideas.
• Unfortunately, it often excludes people outside an organization’s finance team.
• Administrative oversight, financial management, IT support, insurance, facility maintenance, volunteer coordination, and grant compliance all contribute to program success.
• Teach team members how to interpret this information and take advantage of the software’s reporting features to simplify their analysis.

Year-End Fundraising Best Practices

Dive in to learn everything you need to know about a nonprofit budget. Monitoring your revenue and expenses should ideally become a part of your nonprofit’s organizational culture, something everyone is aware of and contributes to. Mark the events in everyone’s calendars, so that it becomes easier to repeat the process each year.

So, the revenue and expenses listed in your https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ other budgets should line up with the overarching predictions in your operating budget. If a different type of budget overlaps multiple fiscal years, make sure your estimates are recorded in the correct annual operating budget. Technology plays a vital role in modernizing nonprofit financial management. Moreover, it saves time and resources that can be redirected toward mission-focused activities. This alignment is crucial for maximizing impact with limited resources.

Digital Fundraising Essentials

• Volunteers are the backbone of nonprofit organizations and their hours should be considered in the budget.
• However, we offer these lists as a starting point for conversations about how to build the budget that best serves your mission.
• Budgeting is a crucial part of keeping your organization on track and solvent.
• In the for-profit world, it’s fairly standard to determine a marketing budget by allocating 10-20% of projected gross revenue to marketing and communications.
• For example, if revenue looks to be falling too short or specific fundraising goals cannot be met, your organization will want to amend its budget.
• Let’s dive into three budgeting best practices (and a downloadable template!) to implement at your organization.

Creating and managing your nonprofit’s budget probably isn’t a favorite annual task. Though budgeting may feel tedious or even overwhelming, having a clearly established budget plays a key role in your nonprofit’s ability to successfully execute its mission. What’s most important is that you establish a detailed marketing and communications budget prior to the start of each fiscal year.