A financial plan is an essential instrument for a nonprofit just as it is for any business. However, whereas a business plan is focused on the services that the company provides, a charitable organization’s financial plan should concentrate on the cash flow. It should specify what type of revenue sources are expected and the amount forecast for each source. It should also include periodic expenses, one-time costs for special events and any other capital expenses. In addition, it should list any contingency plans the organization has in the event that primary market opportunities don’t materialize.
The budget is typically drafted by the staff, however it is usually examined and approved www.boardroomwhich.com at a board meeting. The budget is then used to track and review the progress of various projects, the success of fundraising, and overall financial standing throughout the year. It is crucial that a non-profit regularly examine its budget, then compare it to actual financials and make any changes that are needed.
Nonprofits are more likely to incur more expenses than private individuals, so they must be mindful to ensure they have accurate budget and revenue figures. A budgeting system such as the Jitasa free budget template can help organizations stay in the loop with their numbers by allowing them to compare their the actual and projected figures. Additionally, leveraging financial ratios and calculators could help nonprofits make better-informed decisions about how to allocate their funds.
