Starting a new nonprofit is an exciting journey! You’re full of inspiration and commitment to your cause and community.
Sure, you’ve thought about the money part – maybe you’ve even looked up or applied for a grant or two. But a budget?
“We’re so small,” you think. “I don’t really need a budget... “
Spoiler: you really DO need a budget.
The size of your nonprofit doesn’t make much difference when it comes to needing a budget. At the end of the day, you still need to make sure that your income and expenses are aligned.
And as a new nonprofit, funders will be even more hyper-focused on your finances than they usually are. They want to be sure you have a solid plan for running your organization and stewarding their money.
Taking the time to think through your new nonprofit startup’s first budget is one of the best things you can do to be successful in your first year.
From clarifying your goals to researching available funding and getting a realistic sense of your expenses, creating your budget will empower you to stay in control of your organization’s finances.
Budgeting is an in-depth process – don’t rush it! Give yourself enough time to get it all out on paper, as well as send it to your board members or colleagues for feedback.
Start the whole process at least one month before you need the final document.
The most common type of budget for nonprofit organizations is an operating budget. This is the budget that accounts for the day-to-day operations of your organization.
Like most budgets, your operating budget consists of two major categories: income and expenses.
If you set it all up properly, you’ll end up with a roadmap for navigating all of the funding, programming, and staffing obstacles you’re sure to face in your nonprofit’s first year.