NPDCSNJ Training Series: Budgeting for Non Profit Organizations

Description

Overview: 

Budgeting is a foundational component of both non profit accounting and non profit governance. This course will explain what a non profit budget is and how, if at all, it differs from a budget created for a for profit enterprise. It will also explore the features of effective budgets, identify budget components, explain budget review, and, finally, include a nonprofit budget template. 

Objectives: 

Participants will learn to appreciate a non profit budget as a planning document used to predict expenses and allocate resources for an NPO. In addition, they will learn how to identify and quantify both the costs that an organization will incur, as well as the revenue it expects to receive over a set period of time. 

Participants will be encouraged to consider budgeting as a nine-step process:

1. Identify goals
2. Break down budget components
3. Consider restrictions
4. Forecast revenue and expenses
5. Account for inflation
6. Plan for the unexpected
7. Create a calendar
8. Draft the budget
9. Implement the budget. 

Course Content: 

Participants will learn that there are a variety of budget types that a nonprofit may utilize, including an annual budget, or operating budget, which breaks down annual projected revenue and expenses for the organization. It categorizes revenue by different funding sources and operating expenses by program and overhead costs. 

They will also learn that, depending on an organization’s operations and plans, it may also be helpful to create budgets focused on specific aspects of the organization to ensure everything is in order. For example, participants will learn under what circumstances they might create the following budgets: Participants will also learn that throughout the year, organizations must review these budgets regularly to monitor the process of various projects, fundraising success, and general financial standing—meaning that a budget is a living document that should be at the center of your organization’s financial activities. 

Finally, participants will be encouraged to:

• Review the budgets made during strong economic times, as well as those created during the years of the pandemic and resulting economic downturn to determine what went well and which opportunities could've been improved upon
• Evaluate past financial audits at the organization
• Establish goals that are specific, measurable, attainable, realistic, and time-based (i.e., SMART)
• Evaluate expected revenue by separating and allocating each fund raising source, including fundraising revenue, grant funds, in-kind donations, corporate sponsorships, and other income
• Understand two methods of forecasting—the discount method and the cutoff method
• Evaluate expenses in order to determine and predict the costs a non profit will incur when funding various projects, programs, and campaigns by breaking down the expenses into fundraising, administrative, and program categories, i.e., the nonprofit’s overhead. [The Better Business Bureau recommends that organizations don’t spend more than 35% of their funding on their overhead expenses and spend at least 65% on their programs.] 

Presenters: 

Isolde Benyo/ President and CEO Acute Accounting Solutions Treasurer: Non Profit Development Center of Southern New Jersey 609-744-2041 • isolde.benyo@acuteacct.com

Paul Boland /Vice President of Finance Ateliers FAS Past Treasurer: Non Profit Development Center of Southern New Jersey 215-842-3500 • paul.boland@atelierfas.com