How to Make a Budget for a Non-Profit Organization

Nonprofit organizations, as well as many charitable institutions, are a necessity to help those in need in any country. Many of these institutions take on the structure of corporations with a hierarchy that goes from CEO's on the top all the way down to local management. One of the necessary jobs of these management postitions in a non-profit organization is to form a budget. This plan of action is needed to maximize the utilization of all funds and get the most benefit of any money in the organization.

Difficulty:

Moderate

Instructions

1. Organize a team to come up with all activities that the nonprofit organization partakes in. These may range from charity events to draw in funds to food banks and donation centers to disperse money and necessities to the needy. Detail each event in depth, from the cost of renting a location, wages for non-volunteers, money for incidentals like food for the staff, gas and uniforms, to the cost of purchasing goods to hand out.

2. Gather the detailed expenses and break them down monthly. Include in these the wages and salaries of all paid staff, rent of all properties and incidentals such as overhead of rental spaces like electric, gas, and utilities. With the expenditures broken down monthly, make detailed lists of all incoming monies as well as projected donations. Use previous years numbers to get trends and projections.

3. Make decisions as to which events will be the most cost-effective and provide the greatest benefit to your non profit audience. Analyze the cost of all of the events you selected and compare it to what monies are coming in. Ensure that, while monies left over are not to be considered profit, your incoming monies will cover all the detailed expenses you came up with and not go over by much. Any overage will need to be accounted for and held for the next years budget. Allow some extra monies in your newly formed budget for any unforeseen activities such as natural disasters, economic downturns and other events that your non-profit organization caters to.

4. Implement this budget to all your departments, and ensure that it is followed as precisely as possible. This is key to keeping within your allocated monies and the budget you have set forth.

Tips & Warnings

• Open lines of communication between all your teams is key. A budget works best if people are open and honest with expenditures and are willing to work to keep them in line with the budget.

• Increasing your fund raising is a way to increase budgetary allowances and get more out to the recipients of your non profit organization.

• Serious oversight of all moneys is key to budgetary accounting. While honesty is inherent in most people, there are some who will not think twice about pilfering donations and moneys. Tight accounting will minimize that.