Budgeting for Nonprofits
If your fiscal year is July-June then you already have your annual budget in place, however for those of us that have a fiscal year January-December the budgeting process has begun!
I have a 3 step method for preparing the annual budget for my organization.
1. I make a list of the staff for the organization and then I figure out how many hours each staff person will spend working on each program, as well as how much time they will spend on administration and fundraising time. I do this through conducting a time study--seeing how each staff member spends their time for one particular week, or by looking at staff time allocation from the previous year.
2. I then figure out the costs directly associated with each program, administration and fundraising. This is the fun part because I work with the key managers in the organization to "plan" out the activities of the year, I also look at grant proposals that have been funded because many times the grants dictate the actual activities that will occur within each program.
3. Finally, I figure out what the shared costs are for the organization. Examples of shared costs are costs that are not directly related to a program like rent, utilities, general office supplies, health benefits etc. I then use the staff time percentage I figured out in number 1 to allocate the shared costs across each program, administration, and fundraising.