How to Create your Nonprofit Budget

Posted: Dec 17th, 2020 Updated: Dec 24, 2020

FundHero will help you raise money. You decide where to spend it.

Unless you own your own country or the world's entire supply of vibranium, you're probably running your organization on a budget. Creating an annual budget is usually overseen by the staff and then approved by the board. Your budget is your guide that can help you plan for the future and set goals for fundraising.

Here are FundHero's tips to establish your budget and set yourself up for fundraising success.

 

Establish a budget and stick to it.

Establishing a budget and having the discipline to stick to it is perhaps the most important aspect of a successful organization. You're going to experience a lot of pressures - consultants, advertising, staff and volunteer resources, and most importantly, furthering your cause. Making strategic decisions up front and setting a budget ensures you stay on track. Keep the big picture in mind, and put money towards the items that make a difference.

 

60% (or more) of the budget should be spent directly on your cause

At the end of the day, no consultant, ad agency, or amount of research cares about your cause as much as you do. Your priority, and that of your donors, has a clear focus - furthering the issues you are working to solve. Unless you budget and plan properly, you won't have the resources to make a difference.

 

10% - 15% for fundraising

You've got to spend money (and time) to make money! 

Don't skimp on fundraising! Yes, you need to define your message, support the issues you care about, and increase awareness, but even the most superbly crafted organizational plan will not matter unless you have the resources to make it happen. Plus, every dollar invested in fundraising pay for itself multiple times over, so make sure you’re spending what you need.

A fundraising budget should include direct mail (fundraising appeals), credit card processing, events (that are explicitly fundraising focused), and on software/app tools designed to help you raise money. In a shameless plug for FundHero, we should fit in your fundraising budget too!

 

10%-15% for administrative expenses

Watch your overhead closely. 

Administrative costs are like the Blob. Left unchecked, they grow uncontrollably and will leave your organization stuck in its tracks. Fight hard, especially in the early stages of your organization, to keep your overhead low and manageable.

Admin expenses include:

  • Staff (fundraising, communications, consultants, etc...)
  • Office (utilities, phone, internet, insurance, stationary, email system, etc...)
  • Program (travel, equipment, supplies, etc...)

 

10% - 12% for research, branding and communications

Opposition research, and messaging support can be helpful to your organization, but the primary focus should always be on delivering that message to volunteers, supporters, donors, and spreading awareness. To ensure a balance and that you’re not developing the best story without the means to tell it, try to keep the research and tracking piece to 5% - 10%.

Other items included in general communications are swag and websites, etc...

 

Don’t forget a contingency! Set aside 5% - 10% on items you can’t even think of.

The only thing you can 100% plan for is that something will go wrong with the plan. Sometimes it’s a PR issue, fundraising goals end up short, staff needs comeback larger than anticipated, etc. So, to plan effectively, all campaign budgets should leave 5% - 10% in a contingency fund for whatever the future may bring.

Every budget and organization is different, and you need to make expenditure choices that best fit your goals and needs.

Matt Lyon

Matt has over 12 years of political fundraising experience. Matt’s experience includes overseeing up to fourteen staff members, administering budgets exceeding $1.1 million annually, directing million dollar paid media programs, raising over $5 million for various causes and organizations, and developing and implementing communications strategies that led to dozens of stories in local and national outlets, including the New York Times and Washington Post. Matt is an experienced and campaign veteran always willing to help the next candidate make a difference.