When beginning a nonprofit, it can be difficult to nail down some streams of income. Even more so, it is important to set up a detailed budget so your organization can continue fulfilling its purpose. Cut out unnecessary spending and create a reasonable budget with the tips below.
Determine Your Fixed Expenses
Within your budget, there are certain expenses that you cannot get away from. For example, you need to pay for electricity, rent and other necessary costs. These costs should be the backbone of your budget. You cannot add to your budget without first considering these spending avenues.
The good thing about these expenses is that they are pretty consistent. Rarely will there be major fluctuations in these costs, as opposed to non-fixed costs. Because of their predictability, knowing these costs will better position you to create your budget from scratch and gain an idea of how much wiggle room you have.
What Are Your Variable Expenses?
Contrary to fixed costs, variable expenses fluctuate depending on your usage of the products or services and could also be affected by outside factors. This might include money spent on fundraising, marketing, or events. While these aren’t unnecessary expenses, they can simply fluctuate because of your organization’s need for them. For example, you may allocate more money in your budget or a large marketing campaign one month and then decide to do low-cost media marketing the next month. Within your budget, it is crucial to examine these costs on a monthly basis to ensure you are not overreaching in your spending habits.
Narrow Down Income Sources
In any organization, it is of utmost importance to decide how you will fund your establishment. Especially for nonprofits, in which income is not guaranteed, and consumer purchases are rare, narrowing down income sources is something that should be done in the fundamental stages. Your budget should give an estimated guess of how much money you expect to raise through fundraising.
One proven way to add income to your budget is through grant writing, which procures funders and philanthropic individuals who will donate to your organization. There are countless fundraising strategies available for nonprofits to benefit from.
Budgeting for your nonprofit organization can seem overwhelming at first, especially if you do not have many connections. However, this is why it is important to examine the risks and reach out to funders. Make sure you have a specific mission that people will feel compelled to donate to. The best way to find funders is to partner with people who believe in and support your mission.