What is an Operating Budget?
The operating budget covers day-to-day activities for one year. It includes all expected revenue and planned expenses for running programs and the organization. This budget helps determine if planned activities are financially feasible and identifies potential cash flow issues. It’s the foundation for all other budgets.
| Revenue Sources | 2024 Actual | 2025 Budget | Variance |
|---|---|---|---|
| REVENUE | |||
| Individual Donations | $1,558,130 | $1,650,000 | $91,870 |
| Foundation Grants | $748,792 | $800,000 | $51,208 |
| Corporate Sponsorships | $187,340 | $200,000 | $12,660 |
| Government Grants | $135,450 | $150,000 | $14,550 |
| Program Service Revenue | $113,070 | $125,000 | $11,930 |
| Investment Income | $90,750 | $85,000 | ($5,750) |
| Special Events (Net) | $14,400 | $20,000 | $5,600 |
| TOTAL REVENUE | $2,847,932 | $3,030,000 | $182,068 |
| Expense Categories | 2024 Actual | 2025 Budget | Variance |
|---|---|---|---|
| PROGRAM EXPENSES | |||
| Community Outreach Programs | $1,245,680 | $1,350,000 | $104,320 |
| Education & Training | $567,890 | $620,000 | $52,110 |
| Emergency Assistance | $334,120 | $380,000 | $45,880 |
| Total Program Expenses | $2,147,690 | $2,350,000 | $202,310 |
| SUPPORTING SERVICES | |||
| Management & General | $325,445 | $365,000 | $39,555 |
| Fundraising | $218,310 | $245,000 | $26,690 |
| Total Supporting Services | $543,755 | $610,000 | $66,245 |
| TOTAL EXPENSES | $2,691,445 | $2,960,000 | $268,555 |
| NET SURPLUS/(DEFICIT) | $156,487 | $70,000 | ($86,487) |
Key Budget Assumptions:
- Individual donations projected to grow 6% based on donor retention improvements
- Two new foundation grants totaling $200,000 expected in 2025
- Program expansion will increase participants by 15% across all programs
- Administrative staff salary increases of 3% effective July 1, 2025
- Investment income conservative due to market uncertainty
What is a Capital Budget?
Capital budgets focus on major purchases like buildings, vehicles, or equipment that will be used for several years. These items require special planning because they involve large amounts of money and affect the organization long-term. Capital budgets often span multiple years and may require separate fundraising campaigns.
| Capital Item | 2025 | 2026 | 2027 | Total Cost |
|---|---|---|---|---|
| FACILITY IMPROVEMENTS | ||||
| Building Roof Replacement | $85,000 | $0 | $0 | $85,000 |
| HVAC System Upgrade | $45,000 | $0 | $0 | $45,000 |
| Accessibility Improvements | $25,000 | $15,000 | $0 | $40,000 |
| EQUIPMENT & TECHNOLOGY | ||||
| Program Van Replacement | $0 | $65,000 | $0 | $65,000 |
| Computer Equipment Upgrade | $15,000 | $12,000 | $18,000 | $45,000 |
| Training Equipment | $8,000 | $5,000 | $7,000 | $20,000 |
| PROGRAM EXPANSION | ||||
| New Program Site Setup | $0 | $0 | $125,000 | $125,000 |
| TOTAL CAPITAL EXPENSES | $178,000 | $97,000 | $150,000 | $425,000 |
Capital Budget Funding Sources:
- Building improvements funded through dedicated capital campaign ($170,000 goal)
- Vehicle replacement through combination of reserves and vehicle loan
- Technology upgrades funded from operating budget over three years
- Program expansion contingent on securing $125,000 expansion grant
- All purchases subject to board approval and availability of funds
What is a Project Budget?
Project budgets cover specific programs or initiatives with defined start and end dates. They show all costs associated with a specific activity, helping determine true program costs and set appropriate funding targets. This example shows a new youth leadership program we’re launching with grant funding.
| Budget Category | Year 1 | Year 2 | Total Project |
|---|---|---|---|
| PERSONNEL (65% of total) | |||
| Program Director (0.5 FTE) | $32,500 | $33,800 | $66,300 |
| Youth Coordinators (2 @ 0.25 FTE each) | $22,000 | $22,900 | $44,900 |
| Benefits & Payroll Taxes | $13,600 | $14,200 | $27,800 |
| Total Personnel | $68,100 | $70,900 | $139,000 |
| DIRECT PROGRAM COSTS | |||
| Training Materials & Curriculum | $8,500 | $3,200 | $11,700 |
| Youth Participant Stipends | $12,000 | $15,000 | $27,000 |
| Leadership Retreat | $6,000 | $6,500 | $12,500 |
| Community Service Projects | $4,500 | $5,000 | $9,500 |
| Transportation | $3,000 | $3,500 | $6,500 |
| ADMINISTRATIVE COSTS | |||
| Office Space Allocation | $4,800 | $5,000 | $9,800 |
| Evaluation & Assessment | $2,500 | $3,000 | $5,500 |
| Financial Management (5%) | $5,500 | $5,600 | $11,100 |
| TOTAL PROJECT BUDGET | $114,900 | $117,700 | $232,600 |
Over 2 Years
Participant
Project Duration
Project Cost
Project Funding & Assumptions:
- Funded by $200,000 community foundation grant plus $32,600 organizational match
- Serves 30 youth participants each year (ages 16-24)
- Includes 6-month leadership development curriculum
- Incorporates mentorship, community service, and job readiness training
- Subject to grant reporting requirements and outcome measurements
What is a Cash Flow Budget?
Cash flow budgets predict when money will come in and go out throughout the year. Even if your annual budget balances perfectly, you might face months when expenses exceed revenue. This budget helps identify those periods and plan accordingly, ensuring you have enough cash to meet obligations.
| Cash Flow Item | January | February | March | Q1 Total |
|---|---|---|---|---|
| CASH RECEIPTS | ||||
| Individual Donations | $95,000 | $110,000 | $125,000 | $330,000 |
| Foundation Grants | $75,000 | $0 | $150,000 | $225,000 |
| Corporate Sponsorships | $0 | $25,000 | $0 | $25,000 |
| Government Grants | $0 | $0 | $37,500 | $37,500 |
| Program Fees | $8,500 | $9,200 | $12,800 | $30,500 |
| Investment Income | $7,000 | $7,000 | $7,000 | $21,000 |
| Total Cash Receipts | $185,500 | $151,200 | $332,300 | $669,000 |
| CASH DISBURSEMENTS | ||||
| Payroll & Benefits | $145,000 | $145,000 | $145,000 | $435,000 |
| Program Supplies | $25,000 | $28,000 | $35,000 | $88,000 |
| Rent & Utilities | $18,500 | $18,500 | $18,500 | $55,500 |
| Professional Services | $8,000 | $6,500 | $12,000 | $26,500 |
| Insurance | $12,000 | $0 | $0 | $12,000 |
| Debt Service | $1,850 | $1,850 | $1,850 | $5,550 |
| Other Operating | $15,000 | $12,000 | $18,000 | $45,000 |
| Total Cash Disbursements | $225,350 | $211,850 | $230,350 | $667,550 |
| Net Cash Flow | ($39,850) | ($60,650) | $101,950 | $1,450 |
| Beginning Cash Balance | $456,780 | $416,930 | $356,280 | $456,780 |
| Ending Cash Balance | $416,930 | $356,280 | $458,230 | $458,230 |
Cash Flow Notes & Assumptions:
- January & February show negative cash flow due to timing of major grant receipts
- Annual insurance payment made in January
- Spring gala revenue expected in March ($25,000 net)
- Minimum cash balance target is $300,000 for operations
- Line of credit available if cash falls below minimum target
What is Program-Based Budgeting?
Program-based budgeting organizes your budget around specific programs and services rather than just listing income and expenses by type. This approach helps you understand the true cost of each program and make better decisions about resource allocation. It shows both direct costs and allocated indirect costs for each program.
| Cost Category | Community Outreach | Education & Training | Emergency Assistance | Total Programs |
|---|---|---|---|---|
| DIRECT PROGRAM COSTS | ||||
| Program Staff Salaries | $485,000 | $220,000 | $125,000 | $830,000 |
| Program Supplies | $125,000 | $85,000 | $180,000 | $390,000 |
| Program Equipment | $45,000 | $35,000 | $15,000 | $95,000 |
| Program Travel | $15,000 | $8,000 | $5,000 | $28,000 |
| Total Direct Costs | $670,000 | $348,000 | $325,000 | $1,343,000 |
| ALLOCATED INDIRECT COSTS | ||||
| Administration (15% allocation) | $100,500 | $52,200 | $48,750 | $201,450 |
| Facilities (by square footage) | $48,000 | $28,800 | $14,400 | $91,200 |
| Technology (by user count) | $25,500 | $15,300 | $8,500 | $49,300 |
| Insurance & Legal | $18,000 | $12,000 | $6,000 | $36,000 |
| Total Indirect Costs | $192,000 | $108,300 | $77,650 | $377,950 |
| TOTAL PROGRAM COSTS | $862,000 | $456,300 | $402,650 | $1,720,950 |
Community Outreach
Education & Training
Assistance Case
% of Total
Program Budget Methodology:
- Direct costs tracked separately for each program through accounting system
- Indirect costs allocated based on staff time, space usage, and beneficiary counts
- Administration allocated at 15% rate across all programs
- Facilities costs allocated by square footage: 60% Outreach, 36% Education, 18% Emergency
- Technology costs allocated by number of staff users in each program
What is an Operating Budget?
The operating budget covers day-to-day activities for one year. It includes all expected revenue and planned expenses for running programs and the organization. This budget helps determine if planned activities are financially feasible and identifies potential cash flow issues. It’s the foundation for all other budgets.
| Revenue Sources | 2024 Actual | 2025 Budget | Variance |
|---|---|---|---|
| REVENUE | |||
| Individual Donations | $1,558,130 | $1,650,000 | $91,870 |
| Foundation Grants | $748,792 | $800,000 | $51,208 |
| Corporate Sponsorships | $187,340 | $200,000 | $12,660 |
| Government Grants | $135,450 | $150,000 | $14,550 |
| Program Service Revenue | $113,070 | $125,000 | $11,930 |
| Investment Income | $90,750 | $85,000 | ($5,750) |
| Special Events (Net) | $14,400 | $20,000 | $5,600 |
| TOTAL REVENUE | $2,847,932 | $3,030,000 | $182,068 |
| Expense Categories | 2024 Actual | 2025 Budget | Variance |
|---|---|---|---|
| PROGRAM EXPENSES | |||
| Community Outreach Programs | $1,245,680 | $1,350,000 | $104,320 |
| Education & Training | $567,890 | $620,000 | $52,110 |
| Emergency Assistance | $334,120 | $380,000 | $45,880 |
| Total Program Expenses | $2,147,690 | $2,350,000 | $202,310 |
| SUPPORTING SERVICES | |||
| Management & General | $325,445 | $365,000 | $39,555 |
| Fundraising | $218,310 | $245,000 | $26,690 |
| Total Supporting Services | $543,755 | $610,000 | $66,245 |
| TOTAL EXPENSES | $2,691,445 | $2,960,000 | $268,555 |
| NET SURPLUS/(DEFICIT) | $156,487 | $70,000 | ($86,487) |
Key Budget Assumptions:
- Individual donations projected to grow 6% based on donor retention improvements
- Two new foundation grants totaling $200,000 expected in 2025
- Program expansion will increase participants by 15% across all programs
- Administrative staff salary increases of 3% effective July 1, 2025
- Investment income conservative due to market uncertainty
What is a Capital Budget?
Capital budgets focus on major purchases like buildings, vehicles, or equipment that will be used for several years. These items require special planning because they involve large amounts of money and affect the organization long-term. Capital budgets often span multiple years and may require separate fundraising campaigns.
| Capital Item | 2025 | 2026 | 2027 | Total Cost |
|---|---|---|---|---|
| FACILITY IMPROVEMENTS | ||||
| Building Roof Replacement | $85,000 | $0 | $0 | $85,000 |
| HVAC System Upgrade | $45,000 | $0 | $0 | $45,000 |
| Accessibility Improvements | $25,000 | $15,000 | $0 | $40,000 |
| EQUIPMENT & TECHNOLOGY | ||||
| Program Van Replacement | $0 | $65,000 | $0 | $65,000 |
| Computer Equipment Upgrade | $15,000 | $12,000 | $18,000 | $45,000 |
| Training Equipment | $8,000 | $5,000 | $7,000 | $20,000 |
| PROGRAM EXPANSION | ||||
| New Program Site Setup | $0 | $0 | $125,000 | $125,000 |
| TOTAL CAPITAL EXPENSES | $178,000 | $97,000 | $150,000 | $425,000 |
Capital Budget Funding Sources:
- Building improvements funded through dedicated capital campaign ($170,000 goal)
- Vehicle replacement through combination of reserves and vehicle loan
- Technology upgrades funded from operating budget over three years
- Program expansion contingent on securing $125,000 expansion grant
- All purchases subject to board approval and availability of funds
What is a Project Budget?
Project budgets cover specific programs or initiatives with defined start and end dates. They show all costs associated with a specific activity, helping determine true program costs and set appropriate funding targets. This example shows a new youth leadership program we’re launching with grant funding.
| Budget Category | Year 1 | Year 2 | Total Project |
|---|---|---|---|
| PERSONNEL (65% of total) | |||
| Program Director (0.5 FTE) | $32,500 | $33,800 | $66,300 |
| Youth Coordinators (2 @ 0.25 FTE each) | $22,000 | $22,900 | $44,900 |
| Benefits & Payroll Taxes | $13,600 | $14,200 | $27,800 |
| Total Personnel | $68,100 | $70,900 | $139,000 |
| DIRECT PROGRAM COSTS | |||
| Training Materials & Curriculum | $8,500 | $3,200 | $11,700 |
| Youth Participant Stipends | $12,000 | $15,000 | $27,000 |
| Leadership Retreat | $6,000 | $6,500 | $12,500 |
| Community Service Projects | $4,500 | $5,000 | $9,500 |
| Transportation | $3,000 | $3,500 | $6,500 |
| ADMINISTRATIVE COSTS | |||
| Office Space Allocation | $4,800 | $5,000 | $9,800 |
| Evaluation & Assessment | $2,500 | $3,000 | $5,500 |
| Financial Management (5%) | $5,500 | $5,600 | $11,100 |
| TOTAL PROJECT BUDGET | $114,900 | $117,700 | $232,600 |
Over 2 Years
Participant
Project Duration
Project Cost
Project Funding & Assumptions:
- Funded by $200,000 community foundation grant plus $32,600 organizational match
- Serves 30 youth participants each year (ages 16-24)
- Includes 6-month leadership development curriculum
- Incorporates mentorship, community service, and job readiness training
- Subject to grant reporting requirements and outcome measurements
What is a Cash Flow Budget?
Cash flow budgets predict when money will come in and go out throughout the year. Even if your annual budget balances perfectly, you might face months when expenses exceed revenue. This budget helps identify those periods and plan accordingly, ensuring you have enough cash to meet obligations.
| Cash Flow Item | January | February | March | Q1 Total |
|---|---|---|---|---|
| CASH RECEIPTS | ||||
| Individual Donations | $95,000 | $110,000 | $125,000 | $330,000 |
| Foundation Grants | $75,000 | $0 | $150,000 | $225,000 |
| Corporate Sponsorships | $0 | $25,000 | $0 | $25,000 |
| Government Grants | $0 | $0 | $37,500 | $37,500 |
| Program Fees | $8,500 | $9,200 | $12,800 | $30,500 |
| Investment Income | $7,000 | $7,000 | $7,000 | $21,000 |
| Total Cash Receipts | $185,500 | $151,200 | $332,300 | $669,000 |
| CASH DISBURSEMENTS | ||||
| Payroll & Benefits | $145,000 | $145,000 | $145,000 | $435,000 |
| Program Supplies | $25,000 | $28,000 | $35,000 | $88,000 |
| Rent & Utilities | $18,500 | $18,500 | $18,500 | $55,500 |
| Professional Services | $8,000 | $6,500 | $12,000 | $26,500 |
| Insurance | $12,000 | $0 | $0 | $12,000 |
| Debt Service | $1,850 | $1,850 | $1,850 | $5,550 |
| Other Operating | $15,000 | $12,000 | $18,000 | $45,000 |
| Total Cash Disbursements | $225,350 | $211,850 | $230,350 | $667,550 |
| Net Cash Flow | ($39,850) | ($60,650) | $101,950 | $1,450 |
| Beginning Cash Balance | $456,780 | $416,930 | $356,280 | $456,780 |
| Ending Cash Balance | $416,930 | $356,280 | $458,230 | $458,230 |
Cash Flow Notes & Assumptions:
- January & February show negative cash flow due to timing of major grant receipts
- Annual insurance payment made in January
- Spring gala revenue expected in March ($25,000 net)
- Minimum cash balance target is $300,000 for operations
- Line of credit available if cash falls below minimum target
What is Program-Based Budgeting?
Program-based budgeting organizes your budget around specific programs and services rather than just listing income and expenses by type. This approach helps you understand the true cost of each program and make better decisions about resource allocation. It shows both direct costs and allocated indirect costs for each program.
| Cost Category | Community Outreach | Education & Training | Emergency Assistance | Total Programs |
|---|---|---|---|---|
| DIRECT PROGRAM COSTS | ||||
| Program Staff Salaries | $485,000 | $220,000 | $125,000 | $830,000 |
| Program Supplies | $125,000 | $85,000 | $180,000 | $390,000 |
| Program Equipment | $45,000 | $35,000 | $15,000 | $95,000 |
| Program Travel | $15,000 | $8,000 | $5,000 | $28,000 |
| Total Direct Costs | $670,000 | $348,000 | $325,000 | $1,343,000 |
| ALLOCATED INDIRECT COSTS | ||||
| Administration (15% allocation) | $100,500 | $52,200 | $48,750 | $201,450 |
| Facilities (by square footage) | $48,000 | $28,800 | $14,400 | $91,200 |
| Technology (by user count) | $25,500 | $15,300 | $8,500 | $49,300 |
| Insurance & Legal | $18,000 | $12,000 | $6,000 | $36,000 |
| Total Indirect Costs | $192,000 | $108,300 | $77,650 | $377,950 |
| TOTAL PROGRAM COSTS | $862,000 | $456,300 | $402,650 | $1,720,950 |
Community Outreach
Education & Training
Assistance Case
% of Total
Program Budget Methodology:
- Direct costs tracked separately for each program through accounting system
- Indirect costs allocated based on staff time, space usage, and beneficiary counts
- Administration allocated at 15% rate across all programs
- Facilities costs allocated by square footage: 60% Outreach, 36% Education, 18% Emergency
- Technology costs allocated by number of staff users in each program
