A financial plan is the roadmap to achieving the goals of your nonprofit organization. It should include short-term and long-term financial goals as well as the steps that you will follow to reach them.
The main goal of a nonprofit organization is to raise funds and the success of a fundraising campaign requires careful planning and execution. When creating a budget for a fundraising event, it is crucial to be realistic about the amount of funds you'll raise, using previous events and expenses to help to create a forecast.
Non-profit organizations should also establish a budget for their operations which should include fixed expenses as well as variable expenses. Fixed expenses are those that remain the same year after year, for example, office rent. Variable expenses however are expenses that change depending on the programs or campaigns your organization is involved in.
In addition to the budget, it's also important for nonprofits to develop an effective fundraising plan that will help them reach their financial goals. This involves establishing a timetable for achieving your fundraising goals, and identifying the types of individuals or companies who are the most likely to donate to your cause.
It is vital that nonprofits monitor their actual income and expenses throughout the year to ensure that they are in line with their budget. Monitoring should be incorporated into the company's culture, making it something everyone knows about and understands and a part of their daily work. Accounting software can help streamline this process, making it simpler for nonprofits to analyze reports and information.