How Much Should Technology Cost Your Non-Profit Organization?

This feels like a huge number, considering how much you need to spend on fundraising, human resources, and other daily expenditures. Ultimately, spending your dollars in a strategic manner helps prevent unnecessary expenses from arising in the future. 97 percent of nonprofits have budgets of less than $5 million annually, 92 percent operate with less than $1 million a year, and 88 percent spend less than $500,000 annually for their work. Administrative expenses might not be the most exciting part of running a nonprofit, but they’re absolutely necessary. These costs cover the behind-the-scenes essentials that keep everything moving smoothly. It typically requires getting income from multiple sources for nonprofits to thrive.

How to Keep Program Costs In Check

Typically, these expenses may range between 10-20% of the overall operational budget. For those interested in learning how to balance these costs efficiently, visit How Can You Write a Business Plan for a Charity Nonprofit in 9 Steps? Team-based financial planning is the most effective way to ensure your budget aligns with your organization’s goals. Involve staff and board members in the budgeting process to create a comprehensive strategy that relies on a variety of perspectives. For example, some watchdogs believe nonprofits should spend no more than 35% of their donations on overhead.

Are there different types of nonprofit budgets?

It’s also important to track restricted and unrestricted funds, and how you are spending them. When you are running a fundraising accounting services for nonprofit organizations campaign and say that all donations will go directly to program expenses, those are restricted funds that you need to use to support programs. Program expenses are the costs that are directly related to running your programs.

How Big Are ZipSprout Organizations?

3 Please note that funds relating to Currencycloud’s services are not FDIC insured or protected by the Visa Zero liability protection policy. In regards to Currencycloud’s services when funds are posted to your account, e-money is issued in exchange for these funds, by an Electronic Money Institution who we work with, called Currencycloud. This means that the money behind the balance you see in your account is held at a reputable bank, and most importantly, is protected for you in the event of Currencycloud’s, or our, insolvency. Currencycloud stops safeguarding your funds when the money has been paid out of your account to your beneficiary’s account. At least once a quarter (but ideally bi-monthly or monthly), compare actual expenditures against the projected budget to make sure your nonprofit is on track.

Create dedicated funds for predictable scenarios, like equipment replacement or program expansion, with clear rules for their use. Unlike businesses that can freely allocate revenue, nonprofits must comply with donor restrictions while maintaining operational continuity. This means nonprofits must plan for unpredictable income while still delivering consistent services. Remember that effective financial management looks different for every organization. Start with the tips that address your most pressing needs, then gradually incorporate others as your systems mature.

• Compensation packages frequently include salary, benefits, vacation time, and, if you are lucky, retirement accounts and even life insurance.
• Leveraging technology, such as cloud-based payroll systems, can streamline these processes and ensure compliance with legal requirements.
• Relay is an online banking and money management platform that can help you (and your team members) avoid overspending, get clear on income, and simplify financial management.
• With the right tools, an organization can efficiently manage multiple grants simultaneously, each with unique spending restrictions and compliance requirements.
• How one organization categorizes program expenses on their 990 could be totally different from another.

• Instead of simply listing „program expenses,“ demonstrate how each dollar advances your mission.
• Even organizations working with a shoestring budget must think carefully about costs.
• She has produced over 100 events and raised millions of dollars for organizations Cystic Fibrosis, Jane Goodall’s Roots and Shoots and Union Rescue Mission.
• This leads to better program outcomes and more sustainable funding relationships.
• The number decreased slightly to 16 members in 2007, and the median number is 15.
• When putting in the numbers for your revenue, make sure you know exactly where your funds will come from.
• As a result, you can spend less time worrying about your nonprofit’s expenses and more time helping your beneficiaries.

However, the exact amount may vary depending on the size of the organization, its goals, and the target audience. The right channels for a nonprofit will depend on its target audience, budget, and goals. If you’re undergoing or expecting to undergo significant growth, you should expect to spend a bit more on IT support in NYC to accommodate that growth. From a sample nonprofit budget template to comprehensive nonprofit annual budget templates, it covers all the essentials to keep your budget on track. Include program expenses in your nonprofit program budget template to ensure that your resources are used efficiently while achieving your mission goals.

Even profitable programs can face challenges when expected revenue arrives months after expenses occur or when donation patterns don’t align with regular operational costs. Mastering cash flow management helps prevent these timing mismatches from disrupting your mission-critical work. Launched Queen Bee Fundraising to share the art of nonprofit event planning with organizations worldwide. Through consulting, webinars, workshops and speaking engagements, A.J.’s goal is to make her successful event planning strategies and resources available to all nonprofits, no matter their size or location.

Before starting with what is, essentially, a future-oriented process – clarify the https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ present context. Evaluate current financial health by analyzing the current year-end forecast, current budget variances, and balance sheet strength. Then, take some time to reflect on and learn from programmatic and financial successes and failures. A.J. Steinberg CFRE, has created outstanding fundraising events since 1999 with her Los Angeles-based event planning company.

• These costs include rent, utilities, office supplies, and software subscriptions that help streamline operations.
• It looks like Micro-Sponsorships are feasible – “the Long Tail” is there, and would love any support it can get.
• Make your goals SMART—specific, measurable, actionable, relevant, and time-bound.
• Even when I work with high-budget events, I try to keep the expenses as low as possible in order to maximize the funds that go towards the organization’s mission.
• Such partnerships help achieve economies of scale, efficient resource management in nonprofits, and shared expertise in nonprofit financial reporting.
• At the same time, balancing mission-driven initiatives with responsible financial management is key to ensuring your nonprofit’s long-term sustainability.

This can also come in handy for items with larger costs like photography, videography, or traditional media placements like TV and radio. When determining how to allocate funds, it is important to consider the organization’s overall goals and objectives. For example, if the goal is to increase access to services, then a greater proportion of funds should be allocated to program expenses.