Mastering your projected budget does not have to be as difficult as you might think. However, it is one of the most important tasks your nonprofit should establish. Nonprofits need a projected annual budget for transparency, especially if grant funding is needed. Nonprofits seeking grant funding need to provide an annual budget to the funding source. This way a grant writer from GrantWriterTeam can help you compile your programmatic budget for a particular grant. This proves to a grantor that the requested funds will not be the only funds the organization depends on, as grants are meant to supplement an already established budget.
To define, a budget is a monetary account of all activities of the previous year or of the upcoming year. To make it easier, think of it as a ledger of sorts for income and expenditures at your organization. It is a planning tool created, annually. Normally, the budgeting process begins about 3 months before the end of the organization’s fiscal year. This is so that the board of directors can approve it and make any necessary adjustments. A rock-solid budget helps your organization to understand how much money is being taken in and where it is going. Essentially, it should tell you how much you can afford to spend on the operations of your organization. Make sure you have a computer spreadsheet program or one that comes from your actual computerized accounting program (i.e. QuickBooks, Excel, etc.).
Mastering Your Projected Budget in 5 Simple Steps:
1. Determine a Timeline
First, decide on an approved-by-sate for your budget (before the beginning of the next fiscal year). The fiscal year may be different for some organizations. For example, your fiscal year might begin in February while another nonprofits fiscal year may start in June. In addition, you should also understand who else in your organization needs to see it before the Board of Directors. This helps to determine the timeline for getting ultimate approval.
2. Agree on Program Goals
Second, determine your program goals. Ask questions like: What will your organization do to achieve its mission? How will it convey its vision to the community? You need to prioritize program delivery goals. This means determining which program(s) you find most valuable and want to fund first. In this step, you should set organizational financial goals and clarify annual goals from the strategic plan.
3. Develop an Income Budget
Third, the income budget is based on current fundraising and revenue activities. This is money already coming in. You must know how much money you have to work with. Otherwise, you cannot determine how much money you can spend. Here, you will estimate how much money will be coming in from standing practices, and new activities. If you will be applying for grants, consider that grant makers want to see how much income is already coming in to reassure them that their donation is not your sole funding source.
4. Create a Draft Budget
Fourth, make a draft budget. Assign activities for the goals that you set up earlier. Assign monetary values to each activity as itemized expenditures. For example, if you run a youth organization and want to form a new program for after-school basketball, you need to consider the cost to rent a basketball court and buy uniforms, basketballs, refreshments, and other incidentals. After you’ve assigned monetary values to each item, review and discuss how the budget meets organizational goals. Make adjustments based on goals, income, and expenses. Then, review the final draft.
5. Implement the Budget
Fifth, it’s time to enact the budget and assign management responsibilities. This means you must decide which manager will be held accountable for the completion of certain activities and funding. Or, perhaps an entire department or individual will be responsible for ensuring funding. Incorporate the budget into the accounting system. This way your organization’s activities (planned or not) will function according to the budget. You will then monitor and respond to changes, as needed.
Mastering Your Projected Budget-The Bottom Line
Mastering your projected budget is your key to securing the grant funding your nonprofit needs. With careful planning and a clear understanding of income and expenses, your organization can set itself up for success. Even better, a grant writer from GrantWriterTeam can help guide you through the process, ensuring your programmatic budget is strong and ready for grant applications.
About GrantWriterTeam
Are you a nonprofit or small business in need of some help? If you are searching for grants but are feeling overwhelmed, hiring a grant writer may be the perfect choice for you! Grant writers thoughtfully grant opportunities and consider the pros and cons of applying and the chance of success. Consider your writer an extension of your organization. They will coach you throughout the entire process and curate the project to fit your needs. Your grant-seeking success is our priority at GrantWriterTeam.
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