Budgets should not be “written in stone” because the financial position of the nonprofit may change during the year.Ī budget is a guide that can help a nonprofit plan for the future as well as assess its current financial health. The approved budget then serves as a guide for financial activity in the months ahead. Approval of the annual budget is one of the fundamental building blocks of sound financial management.Ĭreating the annual budget is initially staff’s responsibility, but board members (usually those on the “finance committee” and/or “executive committee”) often review the proposed budget and the full board usually adopts the budget at a full board meeting. One way that board and staff plan for income and expenses in the future is by creating a budget. A key component of financial sustainability is the commitment of board and staff to financial management that includes timely review of financial reports and advance planning.
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December 2022
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