Programs must fit within a nonprofit’s resources. Programs cost money to
run. This money must be generated every year, or the program will fail. To keep
their programs running, nonprofits must manage their money well. For this reason,
they use budgets, just like people do.
Like personal budgets, nonprofit
budgets have two main sections. The first section
lists income, also known as revenue. Here, the nonprofit names all of
of income. The second budget section contains expenses. Expenses
normally include salaries and administrative costs.
These are required just to keep the nonprofit
open. Expenses also include program costs. These enable the
nonprofit to run
Budgets help nonprofits determine how much money they
need to operate for the
year. In every budget, income should at least equal expenses. If expenses are
greater than income, then the nonprofit has a revenue need. It must meet this
need by raising funds from different sources.
Taylor Richards, 18, is a senior in high school in Washington state. Taylor
is active on a youth grantmaking committee run by a local foundation. This
experience has helped Taylor decide to work toward a career in nonprofit
Through her experience with youth grantmaking, Taylor has learned the reality
of running a nonprofit. “It’s important to know how budgets
work and what things cost,” Taylor said. “It’s not like
the bank will just hand you the money. You need to plan for your budget
This past year, Taylor’s youth committee funded several programs
run by other teens. Through these prms, Taylor learned how donations are
overseen. “After we granted money, we did site visits,” she
said. Her group made sure that the youth who received the grants did most
of the work for their programs. “If they weren’t planning on
doing the work, we wouldn’t fund them,” Taylor said.
It was rewarding for Taylor to see how much their programs helped. “We
helped other kids to help themselves,” Taylor said. “It was
nice to be a part of that.”