By streamlining how your team submits expenses and how you approve them, you can save time, minimize manual data entry, and have an audit trail for all your payables. In years of financial stresses, nonprofits can create best- and worst-case scenarios. For example, in the best-case scenario, revenues decrease at or close to the same level as the decrease in expenses. In the worst-case scenario, revenues decrease at a much higher level than the decrease in expenses.

Identifying Potential Risks and Threats

• These risks and the plan, as a whole, are monitored by the client after it is implemented.
• Although considering natural expenses is helpful during the planning process, your final budget should use functional expense categorization to match your financial reports.
• Transparency in financial matters fosters trust among donors, stakeholders, and beneficiaries.
• Every shelf, clothing rack, or display table you don’t have to buy means more funding left for your mission.
• If the CCRC you’re considering is nonprofit, you can review its tax filings at this research site established by the investigative news organization ProPublica.

Use fund accounting software that can handle multiple funds and https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ sub-funds. Integrate your fund accounting with your fundraising software to ensure data consistency and accuracy across your systems. While that’s not reality for any nonprofit, strong financial management enables you to plan for and weather just about any situation.

Why should you complete a plan for financial sustainability?

This presentation slide aims to assist nonprofit organizations in achieving financial sustainability by offering secure future planning strategies and action plans and measuring impacts over three years. This essential slide serves as an effective communication tool for nonprofit executives, board members, and financial planners who need to convey long-term financial strategies effectively. Nonprofits often face challenges in managing their finances effectively.

Nonprofit Budgets: How to Get Started

Instead, they rely on donations, grants, and program revenues to fund their activities. This unique structure makes financial sustainability both challenging and essential. Technology can play a significant role in supporting financial management best practices.

These risks and the plan, as a whole, are monitored by the client after it is implemented. The plan can be modified or adjusted for any future changes to the client’s facts or financial situation. RhodeWay Financial also offers financial literacy classes on a variety of topics. Financial literacy topics may be taught by one of our planners or by someone from our professional network.

Take advantage of pre-built reports to get quick details on your current financial position. These make for good dashboards, so you see your budget vs. actuals, statement of activities, and spending for a specific program right when you log in to your fund accounting system. Integrate your expense management with your fund accounting to sync your data across your systems and avoid duplication and inconsistency. Use purchase cards or a system that creates credit card feeds directly into your expense management. Automatically allocate your expenses to the appropriate funds and programs based on predefined rules and criteria.

• Whether you’rejust starting your nonprofit or have recently added employees to your accounting staff, one of the most important things you’ll need to focus on is nonprofit financial planning.
• Organizations using Sage Intacct’s driver-based models see 20% more accurate forecasts.
• And different groups have different resources available that might be shared.
• You need to track your revenue by fund, so you can see how each dollar is spent and how it contributes to your outcomes.
• It should also include a description of primary expenditures for programs necessary to fund and run the organization.
• By developing a compelling mission statement, nonprofits can build a strong brand identity, attract supporters, and drive long-term success.
• If your organization already has all of the money it needs (or is very close) this step might be very easy.

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Explore how our nonprofit accounting and management software can help streamline budgeting, optimize resource allocation, and improve oversight, so you can focus on making a greater impact. While program expenses are central to your nonprofit’s mission, covering overhead costs like salaries, rent, utilities, and technology is equally important for maintaining smooth operations. A well-structured budget helps your nonprofit to allocate resources strategically, supporting a clear income and expense plan.

Using Financial Reporting Tools for Nonprofit Analysis

• Whether your presentation is to new funders, local partners, or board members, this integrated approach helps clearly convey the important connection between organizational sustainability and community development.
• A budget is a guide that can help a nonprofit plan for the future as well as assess its current financial health.
• Adjust the budget mid-year if unexpected changes arise, like grant delays or increased demand for services.
• Develop messaging tailored to various stakeholders—donors, volunteers, beneficiaries, and staff—to ensure consistent, trust-building narratives.
• It clarifies how funds should be distributed to various programs and initiatives, aligning spending with the organization’s mission.

Instead, treat this as a guideline to reduce overhead spending (within reason) before taking funding away from your programs if you need to cut costs. Note that some revenue sources bridge multiple categories and can be organized in different ways. For example, some nonprofits list corporate grants with their other grant funding, while others consider them a type of corporate philanthropy. For the purposes of this article, we’ll focus primarily on operating budgets because of their central role in nonprofit finance. However, you can adapt some of our tips to create other types of budgets.

Ideal for strategic planning sessions, board presentations, and team alignment meetings – providing a roadmap toward long-term organizational success. Nonprofits need to be quick to protect their goals when the economy changes. Nonprofit financial sustainability depends on strategic financial planning for nonprofits that looks ahead. With 45% of nonprofits without basic emergency funds, it’s crucial to build reserves for nonprofit financial sustainability. Reserves help cover costs during tough times and keep the mission going.