Yes, Community Partners strongly recommends that you prepare an annual budget, an estimate of project revenue and expenses for the year. You may choose to budget each of the twelve months individually, particularly if your activities and expenses are likely to be different at different times of the year. Examples and template are attached to this article.
If you budget twelve months individually, project the revenue and expenses in the months you expect the money to be received or spent. This will help you keep on track as you can compare each month's actuals against the monthly budget, and make adjustments if revenues or expenses are more or less than your budget.
If you need assistance with budgeting please contact your finance liaison.
- Do not spend on budgeted expenses if revenue has not come in as expected, unless your organization has accumulated unrestricted operating cash to cover it.
- When applying for certain grants, you may be asked to provide a budget narrative. The budget narrative explains in written form the numbers and how they were derived.
- When estimating annual expenses, use actual information when possible (salaries, fringe benefits, rent) and use estimated monthly historical trends where reasonable (utilities, phone, internet, postage, travel).
- Regular monitoring of actual revenue and spending compared to budget as the year progresses allows you time to react and adjust your plans as needed.
- Have a plan in mind when you are preparing your budget for the coming year. The plan should include details of your planned activities:
- For you to reach your goals and objectives, what needs to get done, by whom, and by when?
- Include a timeline for your activities. This will help keep you on track.
- Include estimated costs as you think about your plan.
- Will you have enough funds in your project account to carry out your activities? If not, you may need to scale back.
Other things to consider:
- Will you be conducting a training or event? Estimate costs of room rental, parking, trainer, materials, refreshments based on number of attendees.
- Will you be traveling for an event? Estimate the cost of hotel, travel, meals based on number of days.
- Did you remember to include the admin fee/fiscal sponsor fee?
- When sending your budget to a funder or potential funder, send an annual budget, not the monthly budget.