A financial plan, like other businesses is a crucial tool for non-profit organizations. However, while a commercial plan is focused on the services that the company will offer the client, a charity’s financial plan should be focused on the money. It should list the various types of sources of revenue and the anticipated amounts for each. It should also include any recurring expenses, one-time costs for an event and any other capital or ongoing expenditures. It should also include any contingency plans the nonprofit has in case the primary market opportunities fail.

The budget is usually created by the staff, however it is usually scrutinized and approved at an annual board meeting. The budget is used to monitor the progress of projects, the results of fundraising efforts, and the overall financial situation throughout the year. It is important for a non-profit organization to review its budget regularly and compare it with actual financials, and identify where the differences are in order to make changes as needed.

Nonprofits generally have higher expenses than individuals do and must be careful to keep their projected income and expense numbers precise. A budgeting program such as the Jitasa free budget template can aid organizations in staying on top of their finances by allowing them the ability to compare the actual and projected numbers. Financial ratios and calculators are also useful for nonprofits to make informed decisions on how https://www.boardroomwhich.com/basics-of-nonprofit-board-governance to allocate funds.