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What to Put in Your NPO's Budget



Non-profit organizations (NPOs) operate differently from for-profit businesses, and their budgeting process is unique. NPOs have a social or community-oriented objective rather than a profit-driven objective. In this article, we will discuss what to put in your NPO's budget.

  1. Program Costs Program costs are the expenses incurred directly to provide services or products to the community. This includes costs such as salaries, rent, utilities, equipment, and supplies necessary for delivering programs and services.

  2. Fundraising Costs Fundraising costs are the expenses incurred to raise funds for the NPO. This includes costs such as event planning, marketing, printing, and mailing. Fundraising expenses must be managed effectively to ensure that they do not exceed the amount of funds raised.

  3. Administrative Costs Administrative costs are the expenses associated with running the NPO's daily operations. This includes salaries for administrative staff, office rent, utilities, insurance, and supplies.

  4. Overhead Costs Overhead costs are the indirect costs associated with running the NPO. This includes expenses such as accounting and legal services, professional development, and technology.

  5. Contingency Funds It is essential to include contingency funds in your NPO's budget to cover unexpected expenses or emergencies that may arise during the year.

  6. Reserves Reserves are the funds set aside for future use or for a specific purpose. This includes reserves for new program development, facility upgrades, and emergencies.

  7. Board Development Board development expenses are the costs associated with training and development for board members. This includes expenses such as board retreats, training sessions, and workshops.

In conclusion, NPOs require a well-planned budget to ensure that they can fulfill their mission and serve their community effectively. It is important to consider all the above expenses and factor in fundraising goals when creating a budget. NPOs must also ensure that they allocate funds appropriately and maintain proper financial records. By developing a comprehensive budget, NPOs can ensure that they have the resources they need to achieve their goals and make a positive impact on their community.

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