Financial Plan for Nonprofit Organization
A financial plan, like other businesses is an essential tool for non-profit organizations. While a business plan is focused on the services that the company provides the client, a charity’s financial plan should focus on the cash flow. It should contain the kinds of revenue sources and projected amounts for each. It should also include the cost of recurring expenses, one-time expenses for a special event, and any capital or ongoing expenditures. Finally, it should identify any contingency plans the nonprofit has in the event that primary market opportunities fall through.
The budget is usually an employee’s job, but it is usually reviewed by board members and approved at a board meeting. It is then used to monitor and report on the progress of various projects, fundraising success, and overall financial standing throughout the year. It is vital that a nonprofit regularly review its budget, compare it with actual financials, and make any changes that are needed.
Nonprofits are more likely to have higher expenses than individuals, which is why they should be aware of how to maintain their projected budget and revenue figures. A budgeting system like the Jitasa free budget template can help organizations stay in boardroomwhich.com/best-practices-for-board-meeting-minutes/ the loop with their numbers by allowing them compare actual and projected figures. Additionally, using financial ratios and calculators will assist nonprofits in making better informed decisions on how to allocate their funds.