Nonprofit Budgeting and Funding

Updated: Jul 27, 2020

JA Consulting and Corporate Tax Solutions strengthens the community by investing capital and expertise in nonprofits. We work with nonprofits in all fields of service by offering loans, training, and financial management advice and resources to help organizations address unexpected events, finance new opportunities, and realize strategic goals.

Budgeting: A 10- Step Checklist

A budget is a planning tool that reflects an organization’s programs, mission, and strategic plan. This 10-step budgeting checklist helps guide the budgeting process, which typically should begin at least three months before the end of the fiscal year to ensure that the budget is approved by the board of directors before the start of the new year.

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1. Determine timeline

Set target date for board approval

Allow time for each step and for review and discussion

Approve before beginning of fiscal year beginning of fiscal year

2. Agree on goals

Prioritize program delivery goals

Set organizational financial goals

Clarify annual goals from strategic plan

3. Understand current financial status

Review current year income and expense compared to budget

Forecast to the end of the year

Analyze and understand any variances

4. Agree on budget approach

Assign roles and responsibilities

Agree on authority to make decisions

Agree on how much uncertainty can be included (how many unknowns)

5. Develop draft expense budget

Determine costs (expenses) to reach program goals

Determine costs to reach organizational and strategic goals.

6. Develop draft income budget

Project income based on current fundraising and revenue activities

Project new income based on new activities

7. Review draft budget

Verify that the draft meets program and organizational goals

Review and discuss all assumptions

Make adjustments, based on goals and capacity, to match income and expenses

Review final draft for all goals and objectives

8. Approve budget

•Present to any committees as needed

•Present to the board for approval

9. Document budget decisions

•Create a consolidated budget spreadsheet and file

•Write down all assumptions

10. Implement budget

•Assign management responsibilities

•Incorporate into accounting system

•Monitor and respond to changes as needed

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