Budgeting in Not-for-Profit Organizations

Westview Community Center is a not-for-profit organization or NPO that runs an after-school tutoring program for local students.

To keep the program running each year, the director and staff prepare a program budget to plan how the organization will use its funds.

The budgeting process begins by preparing the program expense budget, including tutor wages, learning materials, healthy snacks for students, and the cost of maintaining the classroom space, which adds up to one hundred thousand dollars a year.

The team then prepares the revenue budget by recording funding received from grants and donations totaling one hundred twenty thousand dollars.

Some funds are restricted for specific purposes.

For example, a local business may donate twenty thousand dollars specifically for educational materials, and this amount can only be used to purchase learning supplies.

A comparison of the revenue and expense budgets shows that the program budget has a surplus of twenty thousand dollars.

This budget helps the organization monitor how funds are used, follow donor requirements, and ensure the tutoring program continues to support students effectively.