Starting a non-profit organization is a rewarding, rich way to give back to the community, whether you’re helping families with sick parents or children, providing enriching activities to children, or offering care to the less fortunate. However, every successful non-profit still needs a budget, or else it might end up folding. Budgeting for a non-profit takes care, diligence, and a keen eye for moving money.
Come Up with Realistic Cost Projections
One of the key factors in creating a budget for a not-for-profit organization involves estimating the income you hope to generate to fund your programs. If you’re creating a budget for an existing non-profit, this is relatively easy. You simply need to look back over the past several years and discover what you spent. If this is your first year as a non-profit, ask for advice from other boards or organizers, or research how much it costs to fund similar activities.
Projecting the amount of money you need is essential. Even if it’s not dead-on, you need a close estimation. That way, you’ll have a rough idea of how many contributions you need, and how many fundraisers you’ll need to host throughout the year.
Figure Out Your Fixed Costs
Even though this is a non-profit organization, you still have fixed costs to consider. Fixed costs encompass two categories: direct costs and indirect costs. Direct costs apply directly to your non-profit, so they go toward buying food for families, helping with medical supplies, or purchasing equipment for after school programs. Indirect costs cover your expenses. They include:
- Salaries for employees
- Rent and utilities for your space
- Advertising and printing
- Office supplies
Typically, you want fixed costs covered by the revenue you can always count on through contributions from board members, friends, or family, and from your fund-raising opportunities.
Ask for Help When You Need It
People who chair non-profits are amazing. They’re selfless, giving, and thoughtful people who want to do good things for their community and the people around them. That being said, not everyone on the board of a non-profit has a background in business, and that’s okay. That’s why there are professionals to help you. If you need advice on how to budget for your organization or want to see how a similar charity works, visit Scott Gelbard’s blog for knowledgeable information that can help get you started in the right direction.
Plan for Successful Fundraisers
The nature of your non-profit will have an effect on the types of fundraisers you host. You have to think about the target, the people you’re trying to help, as well as where you live and the people likely to come to your fundraiser. Most non-profits stage several throughout the year, and you can certainly tailor them to different groups of people. If you’re looking for large contributions, a black-tie silent auction in a ritzy locale is an excellent choice, but you may also want to stage a fun carnival or potluck in an area that feels comfortable for your target.
Whomever your non-profit helps, you’re doing a wonderful thing. You’ll simply help more people if you have a well-planned budget that covers all your expenses and needs.
Image via Flickr by Geoff Livingston