Page 2 - Finance Sustainability Supplemental Materials

10 Step Annual Budget

Checklist

A budget is a planning tool that reflects an organization’s programs,
mission, and strategic plan. Typically the budgeting process should begin at least three months before the
end of the fiscal year to ensure that the budget is approved by the board of directors before the start of the
new year.

1. Determine timeline 6. Develop draft income budget
† Set target date for board approval † Project income based on current fundraising

† Allow time for each step and for review and and revenue activities
discussion † Project new income based on new activities

† Approve before beginning of fiscal year
7. Review draft budget
2. Agree on goals † Verify that the draft meets program and
† Prioritize program delivery goals organizational goals

† Set organizational financial goals † Review and discuss all assumptions
† Clarify annual goals from strategic plan † Make adjustments, based on goals and
capacity, to match income and expenses
3. Understand current financial status † Review final draft for all goals and objectives

† Review current year income and expense
compared to budget 8. Approve budget

† Forecast to the end of the year † Present to any committees as needed
† Analyze and understand any variances † Present to the board for approval

4. Agree on budget approach 9. Document budget decisions

† Assign roles and responsibilities † Create a consolidated budget spreadsheet
and file
† Agree on authority to make decisions
† Write down all assumptions
† Agree on how much uncertainty can be
included (how many unknowns) 10. Implement budget

5. Develop draft expense budget † Assign management responsibilities

† Determine costs (expenses) to reach † Incorporate into accounting system
program goals † Monitor and respond to changes as needed
† Determine costs to reach organizational and
strategic goals

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