Nonprofit Budgeting Essay

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Recommended: Importance of budgeting in an organization

Introduction Budgeting correctly and intelligently is what constitutes how successful financial management within a nonprofit organization is. Implementing a budget allows organizations for their financials to be strictly internal, budgets can always be revised due to their openness, there are conventional standards, rules are self-imposed, there are no legal requirements, no outside oversight, and lastly they can predict future decisions. The above characteristics of budgeting within an organization show how budgets can be used as planning, management, and communication tools. A nonprofit organization can use budgeting as a planning, management, and communication tool in many different ways. Since a board of directors should communicate to their organization to uphold their standards, mission, and accountability it would come as no surprise as building a budget for their nonprofit can help the success and overall achievements for future endeavors. For financial success within an organization, budgets should include key aspects and funding goals to keep spending in line …show more content…

Many organizations use budget plans or figures to accurately lay out all of their ideas, and goals for spending in the fiscal year. For example, in the article “Planning and Budgeting in Nonprofit Organizations” there is a figure on page 25 that shows how a nonprofit organization plans their annual budget cycle. In this figure it shows the months of the year with the financial planning included in each specific month by a designated level of the organization. The levels are the board/management committee, permanent personnel division/regions, and the performance measurements. By organizing a budget in a chart by separating the goals by month and level/team, it shows communication and management because it lays out all of the steps, and plans that go into budgeting for the

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