Financial Plan for Nonprofit Organization

A financial plan, as any other business, is a vital tool for non-profit organizations. While the business plan focuses on the services the business will offer, the financial plan of a charitable organization should be centered on the financials. It should detail what type of revenue sources are expected and the exact amount forecast for each source. It should also mention any periodic expenses, one-time costs for a special event, and any other capital or ongoing expenses. It should also include any contingency plans the nonprofit has in the event that primary market opportunities don’t materialize.

The budget is usually created by the staff, but it is usually discussed and approved during the board meeting. The budget is then used to track and provide an update on the progress of different projects, fundraising success as well as the overall financial condition throughout the year. It is essential for nonprofits to examine its budget on a regular basis and compare it to actual financials, and see where the differences are so that they can make adjustments when needed.

The majority of nonprofits have more expenses than people and must be extremely careful to keep their budgeted income and expenses accurate. Utilizing a budgeting system such as the free budget template Jitasa offers helps organizations keep their numbers up-to-date by making it easy to compare actual figures with projected ones. Additionally, using financial ratios and calculators will help nonprofits make better-informed choices about how they allocate their funds.

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