6. Prepare and Manage the Budget

  1. Charles K. Coe

Published Online: 9 MAR 2012

DOI: 10.1002/9781118386064.ch6

Nonprofit Financial Management: A Practical Guide

Nonprofit Financial Management: A Practical Guide

How to Cite

Coe, C. K. (2011) Prepare and Manage the Budget, in Nonprofit Financial Management: A Practical Guide, John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9781118386064.ch6

Publication History

  1. Published Online: 9 MAR 2012
  2. Published Print: 13 JUN 2011

ISBN Information

Print ISBN: 9781118011324

Online ISBN: 9781118386064

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Keywords:

  • budget;
  • chief executive officer (CEO);
  • revenue;
  • stakeholder

Summary

All nonprofits, regardless of size and mission, should adopt an operating budget that estimates revenues and expenses for the next fiscal year. Multiple stakeholders, including the Board, the CEO, staff, funders, and other constituents, such as clients, customers, and community partners, play a budgetary role. With input from key stakeholders, the budget process follows four steps: the board sets the policy direction; following the Board’s direction, the CEO prepares the budget; the board reviews and adopts the budget; and the CEO and staff execute the budget. The amount of revenues drives and underpins budget making. Nonprofits have seven principal types of revenues. The CEO distributes the budget calendar, budget request forms, and instructions to program managers, who budget for salaries, fringe benefits, supplies, and capital items.

Controlled Vocabulary Terms

Nonprofit management; Operating budget; Stakeholders