How to Start a Nonprofit: Creating a Nonprofit Budget and Fundraising Plan.
Welcome back to our series on how to start a nonprofit organization. We talked about creating a nonprofit business plan and recruiting your board of directors during our first two blog posts. In this article, we will discuss how to create a nonprofit budget and fundraising plan.
Creating a Nonprofit Budget
Creating a nonprofit budget may seem scary and overwhelming, but it doesn’t have to be. To begin, make a list of your anticipated expenses, including program costs, payroll, office supplies, building rental fees, and more. Next, think about what sources of income you will have. Income sources for nonprofits tend to include program fees, individual donations, grants, event income, and in-kind donations.
When creating the Dearborn Toy Library budget, our expenses included material costs to set up the library, insurance, computer software costs, office supplies, and payroll. We made sure to split up the payroll into program payroll and administrative payroll to have a clear understanding of how much we were spending on programs vs. administrative costs. This percentage is significant to donors and foundations. Try not to spend more than 30% on administrative costs.
The Dearborn Toy Library’s income sources included membership fees from families who will utilize the library, donations from individuals, grants, and in-kind contributions. You can view our FY20 budget here.
When setting up your organization’s budget, reach out to a trusted accountant, or use this template created by Global Giving.
Fundraising Plan
Now that you understand your anticipated expenses and how much money you need to raise to cover those costs, it is time to develop a fundraising plan or development plan. For small or start-up organizations, it is wise to follow these tips:
Start with Individual Donations
Building a strong base of individual donations is one of the most secure ways of funding your organization. Consider approaching individuals who have a link to you or your board members, who have the ability to give, and who are interested in your mission. Use this gift calculator to determine how many donations of each size you will need to fund your organization.
Develop a Case Statement
Case statements are documents that describe your organization, explain why it is a vital service to the community, highlight your programs, and invites individuals to give. You can use your case statement when approaching individuals. Click here to view the Dearborn Toy Library Case Statment that we created using Canva.com.
Consider Events and Grant Opportunities.
You may want to think about hosting an event to drum up excitement about your new organization. Events typically have a low return on investment, so it is important not to assume that an event will fund your entire goal, but events are great ways to reach a lot of people at once. Think of them as a marketing tool.
Last think about whether you know of any seed grant opportunities for brand-new organizations. Most foundations want to see a completed 990, which you won’t have until after your first year of operations. However, some groups fund start-ups. Make sure you are aware of start-up grant opportunities in your area.
If you want to learn more about creating a budget for your new organization or developing a fundraising plan, click here to contact Spark Group for a free consultation.
Join us next week to learn about hosting your first board meeting.
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