Empowering Your NPO: Budgeting for Success

Budgeting for Success

Budgeting is a crucial activity for nonprofit organizations as it aligns its financial resources with its mission-driven goals. It is a strategic tool enabling nonprofits to prioritize their programs and services, measure performance, and make informed decisions. Without a well-structured budget, a nonprofit may risk inefficient use of resources, financial instability, and potential inability to fulfill its mission. Budgeting is not just about numbers but also about fulfilling the mission and maintaining the organization’s integrity and sustainability.

I speak with five to ten nonprofit professionals weekly in a mentoring capacity. More times than not, we will talk about how their organization’s finances are not where they would like them to be. When asked what the solution to their problem is, 99% of the time, they will tell me they need to raise more money. That may be true, but when I ask to review their organization’s budgeting files, I will be shown a basic budget that doesn’t communicate the organization’s short or long-term vision.

I love introducing nonprofit professionals to the Annual Organization Budget with Cashflow. We have used this budget daily over the past ten years at The Library Project, which has served us well. I highly recommend this budget.

Plan Strategically About Your Fundraising

When filling out the Annual Organization Budget with Cashflow for the first time, I recommend starting with your fundraising strategy. Do two things; 1) think about the types of funding sources you want (corporate, foundation, individual, events, campaigns, or other) and, more importantly, what types you do not want to pursue, and 2) build your fundraising capacity over time.

For example, at The Library Project, we focus our fundraising efforts on corporate and online fundraising but do not have a focus on foundations; this is a decision that we make at the budgeting stage. This defines everything from our HR to programming. Finally, I recommend building your fundraising capacity slow and steady. If you aim to raise $1,000 monthly through online donations, then make that an annual goal. Start by putting $50 down in January, then $75 in February, and $900 in November. This will set your fundraising team up for short-term wins that will build into long-term successes.

Plan Your Spending Like a Nonprofit

The Annual Organization Budget with Cashflow approaches a nonprofit organization’s spending strategy through the lens of a nonprofit organization, not a for-profit corporation. This is important.

Initially, you will see that Expenses are broken apart into two distinct sections; Program Expenses and Overhead Expenses. I will not go into great detail about the differences between Program and Overhead Expenses. With that said, it is important to ask yourself questions like, “Is this office being used to implement or design programs?” If yes, putting your office down as a Program Expense might make sense. In the Reports section at the bottom, you will find an Overhead Ratio which calculates the percentage you plan to spend on Overhead Expenses.

Have Fun (Play with the Numbers)

I can almost guarantee that your first budget will be messy. This still happens to me, and I’ve been creating nonprofit budgets for twenty years. Take a deep breath, and begin to push your numbers around. Change your fundraising plan, update your HR strategy, and ask yourself if your monthly goals are realistic. Do not forget to input your Beginning Cash Position at the bottom (E144). This will automatically calculate your cash balance at the end of each month.

Most importantly, remember to have fun. You are not only making an annual budget for your organization. You are also creating a plan to realize your organization’s mission and vision to make the world a better place.

Ten Fundraising Opportunities

The Toyota Foundation: The website address is https://www.toyotafound.or.jp/english/. The Toyota Foundation is a non-profit organization that supports initiatives that promote sustainable development, human rights, and intercultural understanding in Asia and Oceania. Interested organizations can apply for a grant by submitting an online application.

The Rockefeller Foundation: The website address is https://www.rockefellerfoundation.org/. The Rockefeller Foundation is a private foundation that works to promote the well-being of humanity around the world. The foundation does not accept unsolicited proposals, but interested organizations can learn about their current funding opportunities and application process on their website.

The Global Fund for Women: The website address is https://www.globalfundforwomen.org/. The Global Fund for Women supports women-led organizations that advance gender equality and human rights. Interested organizations can apply for a grant by submitting an online application that includes their program goals, budget, and organization’s background.

Women First Digital: The website address is https://www.womenfirstfund.org/. Women First Digital is a grant-making initiative that supports the use of technology to address gender-based violence, harassment, and abuse. The foundation provides funding for innovative projects that use technology to promote women’s safety, security, and rights online. Interested organizations can apply for a grant by submitting an online application through the Women First Digital website.

The Global Fund for Children: The website address is https://globalfundforchildren.org/become-a-partner/. The Global Fund for Children invests in grassroots organizations around the world that support the education and development of children and youth. To apply for a grant, organizations can submit an online pre-application to determine eligibility. If eligible, they will be invited to submit a full application.

African Women’s Development Fund (AWDF): The website address is https://awdf.org. AWDF is a grant-making foundation that supports the leadership and rights of African women, particularly those who are marginalized. The foundation provides financial and technical support to women-led organizations in Africa to advance social justice, gender equality, and women’s empowerment.

The Ford Foundation Center for Regional Development and Cooperation (FFCRDC): The website address is http://www.ffcrdc.org/. FFCRDC works to promote sustainable development, regional cooperation, and peacebuilding in Asia through research, training, and networking. The foundation seeks to strengthen the capacity of local actors and organizations to drive social change and foster inclusive and equitable development.

Women Fund Tanzania (WFT): The website address is http://wft.or.tz/. WFT is a non-governmental organization that provides grants and capacity-building support to grassroots women’s organizations in Tanzania. The foundation aims to promote women’s economic empowerment, gender equality, and the participation of women in decision-making processes.

Xoësé: The website address is https://xoese.org/. Xoësé is a community-based organization that works to promote the rights and well-being of indigenous women and children in Togo. The foundation supports initiatives that improve access to education, healthcare, and economic opportunities for indigenous communities and advocates for their rights to be recognized and protected.

Urgent Action Fund-Africa (UAF-Africa): The website address is https://www.uaf-africa.org/. UAF-Africa provides rapid response grants and advocacy support to women human rights defenders facing urgent threats in Africa. The foundation aims to strengthen the protection and resilience of women human rights defenders and promote their role in advancing social justice, peace, and human rights in the region.

The Nonprofit Toolkit

The Nonprofit Toolkit was created by nonprofit professionals for nonprofit professionals. We want you to have the tools you need.

These are our ten most downloaded tools.

  1. ​​Annual Organization Budget with Cash Flow (Excel)
  2. Program Budget - Template (Excel)
  3. Ultimate Annual Multi-Currency Fundraising Pipeline (Excel)
  4. Annual Fundraising Pipeline (Excel)
  5. Suggested NPO File System (System Files)
  6. Ultimate Working Budget w/ Cash Flow (Excel)
  7. Bylaws - Detailed (Word)
  8. Salary Bands Planning File (Excel)
  9. Ultimate Working Budget (Excel)
  10. Tax-Deductible Receipt (Word)

We currently have over 80 tools available to download today. All 100% free.

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