Your organization’s budget is so much more than an exercise in number crunching; it becomes your to-do list for the year. Your budget becomes the primary method of communicating your organization’s values. As a nonprofit leader, you know that if it makes it into the budget, it will happen. So, if you set an audacious goal, break it down into manageable steps, then layer its cost requirements into the budget, you have a roadmap built into the structure of your organization to accomplish the goals you set. This makes the budget a powerful tool for change. If this seems daunting, keep reading for eight simple steps to assemble your annual budget.


1. Take a current snapshot: Review your current financial status. First, evaluate your current income and identify its sources. Next, take inventory of all current expenses and identify potential areas of unnecessary spending or where you need to be spending a little more money

2. Take a future snapshot: Canvas your expenses and income sources, and account for the changes that you know are coming. If your medical premiums are increasing by 10%, add that to your expenses. If you expect to lose a grant source in the coming year, adjust your income figure accordingly.

3. Dream it, then price it out.: Determine how much your dream initiative or purchase will cost and add it to next year’s expenses. Be sure to include the one-time costs as well as all the recurring usage or maintenance costs. A new van has a purchase price, plus ongoing insurance, gas, and maintenance expenses.

4. What’s the new number?: How much more income do you need to cover your anticipated operating expenses and accomplish your set goals?

5. Make the ends meet: Get creative about your untapped potential for income. You know the number you need to reach, so explore all the options available to you to reach it. Remember that performing additional work to increase your income will also incur additional expenses in delivering that work.

6. Sleep on it: Take time to sit with the plan you and your team have created. Take it through as many rounds of discussion and editing as is needed.

7. Be realistically optimistic: If you’re overwhelmed by the number you need in order to reach your goal in one year, then take a fresh look at the goal and rethink what is possible over the next 12 months. Break your goal into stages, carefully consider what can be done this year, and determine what can be included in future budgets.

8. Share the goals and the plans: Include your team in the budget process because they’re a critical part of accomplishing any goal, no matter how big or small. Get them on board with what you want to accomplish and the steps required to find success. Involving your nonprofit board in the process is also critical. As a nonprofit leader, you need their help to shape the outcome and to build the momentum needed to accomplish the set goals.


For any nonprofit, your budget is your friend, not your foe. It’s a tool that shows you where you are now, and helps you move incrementally to where you want to be in the future. Use this powerful tool to your advantage. 

Need some help in crafting a budget that works for you and not against you? Fordable Fundraising can help. Schedule your FREE 30-minute consultation today and let’s look at your budget together.