The budget process was described in the Budgeting section as the way an organization goes about building its budget. In this, the first of a four-part series on good budgeting approaches, we begin with preparing to budget.
Confirm your budget's relationship to your mission and long range/strategic and financial goals.
• Direct costs relate to a specific project or program. Examples include scenery for Play #2, contracted faculty for the April-May workshops, supplies for the summer camp program or the food pantry, counselors for shelter clients, etc.
• Shared costs are direct costs that may apply to one or more projects or programs. These are shared, not allocated on a common cost basis across all organizational activities.
Indirect, Core Function Costs, Overhead, Common Costs
The first internal steps in the formation of a new nonprofit involve building a board, defining the purpose and future goals for the organization, setting up an office and/or service facilities, and setting up various systems to allow for proper recordkeeping and communication.
Depending on many factors including the size of the board, the size of the budget, and the magnitude and complexity of existing financial assets, the finance committee may be called upon to perform the roles of two other committees that are usually separate in larger organizations: the audit committee and the investment committee. The basic audit and investment committees’ responsibilities include:
One of the most frustrating internal control processes for accountants and auditors alike is the dreaded company credit card and employee expense reimbursements. You might be thinking, let’s
State laws determine the minimum size for nonprofit boards. In most states it is three. However, the number varies so you should be familiar with your state statutes.
Very often, the first board is made of friends of the founder or is a group of similarly-thinking individuals who are interested in and committed to the mission of the organization.
