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Budgeting is essential to your success as a nonprofit. With the right budget, you can hire internal staff members, purchase tools and technology, and ultimately move closer to your mission.
Charitable giving increased nearly 9% in the United States from 2020–2021 (an impressive feat, considering the U.S. hit a record-breaking $471.44 billion in charitable giving in 2020). But even with these staggering numbers, many nonprofits are still underfunded—particularly small- to mid-sized organizations.
In fact, Forbes reports that the top 100 nonprofit organizations in the United States receive $54.4 billion in donations—or 11.5% of all charitable giving. Considering there are over 1.5 million nonprofits registered in the U.S., this means that .01% of all charities earn nearly 12% of all charitable donations.
Grassroots nonprofits, by stark contrast, are often scraping by to fit within their annual nonprofit budget plan. Research shows that over half of nonprofits fail to exist after several years, whether it’s a lack of a business plan or strategic planning, poor leadership, or simply being unable to raise the necessary funds.
To help ensure your nonprofit stays on track, we’re walking you through every line item you might need to include within your budget and showing you how to create your own nonprofit budget template.
How to create a nonprofit budget template: 5 sections to include
Even though you fall within the nonprofit sector, your organization still runs like a small business. Like any other small business, you’ll need enough cash flow to cover all your operating expenses (e.g., paying staff salaries, keeping the lights on, and paying upfront costs for fundraising events).
To ensure you have enough funds in your nonprofit operating budget, you’ll need to create a complete (and somewhat exhaustive) list of expenditures. Below, we offer several areas you’ll want to cover within your nonprofit budget template:
1. Personnel expenses 👯
Whether you’re a nonprofit organization or a small business, your people will always be your largest expense. In fact, some estimates state that your payroll will account for 18-52% of your total budget.
However, employee salaries aren’t the only item nonprofit leaders should plan for. Your total staff expenses encompass:
- Benefits: These include employee benefits include health insurance, 401(k) matching, parental leave, and other perks.
- Taxes: While nonprofit organizations don’t pay state or federal income taxes, they do pay employee taxes for their staff.
- Volunteer appreciation: A team of volunteers can significantly cut down on payroll. However, you might want to keep volunteers happy by providing them with snacks and refreshments at events, sending them home with a free swag bag, or even throwing a volunteer appreciation event at the end of the year.
2. Facilities expenses 🏢
Nonprofit organizations need space to conduct their work, including office space and parking for their employees.
Even if you operate within a virtual working environment, you will most likely have facilities expenses, such as work laptops or technology reimbursement for your team.
When piecing together a nonprofit budget template, be sure to add line items for the following:
- Rent: Your rent includes your property rent (or mortgage), parking fees for employees, property taxes (if any), and fees for any coworking spaces.
- Utilities: Your utilities make up most of your bills, including gas, electric, water, and cable/internet fees. If you run a virtual working environment, you might consider reimbursing employees for a portion of their Wi-Fi bill.
- Maintenance: Maintenance costs ensure your team is equipped to do their job, in a safe, clean working environment. This might include a monthly cleaning fee, repair costs, or even a new microwave for your employee lounge.
3. Administrative costs 🖌
Your administrative costs encompass a wide range of expenses for your organization. These costs could be related to office supplies, technology and software subscriptions, or postage.
When thinking about budget allocation for administrative costs, think about the following:
- Technology: Your tools and technology costs could come from every department, including your project management software, CRM subscription (Psst! Givebutter has a built-in CRM platform that’s completely free to use and designed exclusively for nonprofits), Microsoft Office (for access to Microsoft Word and Excel), accounting software, or other tools for financial management.
- Office supplies: Office supplies could encompass desks and chairs for your employees, pens and paper, or printers. If you work in a virtual office environment, you might want to reimburse home office purchases for your employees.
- Printing: You will need to print materials for nonprofit programs and fundraising campaigns, such as flyers, signage, or even swag kits for top supporters.
4. Program expenses 🎒
To ensure the ongoing financial health of your organization, you’ll need to create a program budget.
Your program expenses include any costs incurred while trying to carry out your mission, whether it’s providing housing, health care, or meals within your community.
The budgeting process for programming varies widely from organization to organization. However, a nonprofit budget template for programming might include:
- Educational organizations: If your organization provides academic support for students, your expenses might include books, technology fees, or school supplies.
- Arts programs: If you’re involved in the arts and sciences, you might experience costs related to museum or theater admissions, student productions, or art supplies.
- Environmental sustainability: If your organization hopes to protect the planet, your expenses might include funds toward research and development, public awareness campaigns, or supplies for clean-up crews.
5. Marketing and fundraising expenses 🎉
Part of running a nonprofit business is ensuring you have enough funds to accomplish your mission throughout the fiscal year. But as the saying goes, “You need to spend money to make money,” which is where fundraising and marketing expenses come in.
Marketing and fundraising costs encompass all tools, supplies, and technology used to drive donations (i.e., the main revenue source for your organization). These might include the following line items in your nonprofit budget template:
- Grant writing: You may need to hire a copywriter to submit grant proposals to various organizations.
- Marketing expenses: These might include your marketing automation software (or simply use Givebutter’s free marketing automation platform), graphic design tools (like Adobe Creative Cloud), social media scheduling, or hiring a marketing agency to carry out various campaigns.
- Advertising: If you have a little extra in your budget, you might want to invest in Google Ads, Instagram or Facebook Ads, or advertisements in your local newspaper. Pro tip: Google offers grants toward Google Ads for nonprofits.
- Travel: In some cases, you might need to fly executive directors, board members, or other stakeholders to a different region for a campaign.
Use Givebutter to cut down on your total expenses
To ensure the success of your organization, you need to stick to a budget. As you build your own nonprofit budget template, you’ll want to include sections for personnel, administrative costs, rent and utilities, program costs, marketing and fundraising, and anything else relevant to nonprofit management.
If you find yourself operating under a very tight budget, Givebutter can help. Givebutter is the modern, always-free, all-in-one fundraising platform that’s built with donors in mind. Givebutter’s 130+ tools are free because of donor tips, which helps it maintain the lowest pricing in the industry. Plus, Givebutter’s complete fundraising platform comes with a built-in CRM system, marketing automation, and fundraising to help you reach your goal.
Ready to see how Givebutter can help you stick to your budget and ultimately accomplish your mission? Take a tour to get started.
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