From Marilynn Boyko, of IHaveMy501c3NowWhat.com (like that URL name?) comes this advice on creating a budget for your nonprofit organization:
Creating a Budget
Budgets should be in place before the beginning of the fiscal year each year, with the past year’s budget closed out.
Each year the board should be the one with the assistance of the Executive Director to create a budget with line-items of expenses and revenues.
Start with Expenses
- A line item refers to expenses such as facility rental, telephone, program operations, event costs, etc.
- Each line item has an estimated cost for each quarter which totals up at the end of the year.
Then each quarter the line-item is examined by the treasurer and the board to compare planned versus actual.
- Compare what was planned to be spent and what was actually spent. Sometimes what was spent exceeds the allocation and sometimes it doesn’t.
- When the line item exceeds the amount, money has to be allocated from another line item in order to balance the budget. It is all about balancing the budget and being wise stewards.
Then Plan Your Estimated Revenues
- Then compare the planned versus actual revenues. Mid-course corrections can be made and adjustments made for each line item.
- This keeps the board abreast and responsible for the financial health and well-being of the organization, and assists in keeping things real, realistic, and manageable.
Order a copy of Money Management in a Homeschool Organization. It has sample budgets and tips to make record keeping easy!
Carol Topp, CPA