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A 10-Step Plan to Create Better Nonprofit Budgets July 28, 2025

Resources nonprofits can use

Since 1988, IFF has helped nonprofits serving a variety of sectors increase their financial stability, expand their programmatic offerings, and achieve their missions. We regularly share learnings we’ve accrued along the way that are designed to provide nonprofit leaders with foundational knowledge about financial management, real estate, and construction. To access past resources, click here. 

Financial management can be a daunting task for any organization, and that’s especially true for small nonprofits without a dedicated finance department. Absent a chief financial officer or CPA on staff, the essential work of assuring the organization’s financial health often falls on one person or a small group already juggling program delivery, daily operations, and fundraising to sustain the organization’s mission. Adding everything that goes into budgeting to this mix can quickly become overwhelming.  

It doesn’t have to be, though, because there’s a better way for nonprofits in this situation to manage their budgets that doesn’t place the burden entirely on the executive director working alone or with a small group of organizational leaders. By embracing team-based financial management, nonprofits can more effectively create a budget that aligns with the organization’s values and mission goals.  

After all, program staff know best what’s been missing, what’s been underutilized, and what it really costs to run their programs. Human resources staff understand the true costs of turnover, new hires, benefit changes, and salary increases. And involving Board members throughout the budget process helps inform goals for the next year and avoids any unexpected questions when the time comes for the budget to get approved. 

That’s why team-based financial management is so powerful. It connects goals to dollars, creates shared ownership of financial performance, and strengthens communication across teams. It helps everyone from frontline staff to the board understand not just where the money goes, but why. This empowers every member of the team to contribute to the organization’s financial health and sustainability of its mission, and it enhances team members’ ability to communicate the organization’s financial story to key stakeholders. 

Based on IFF’s experience with nonprofits across the Midwest that have embraced a team-based approach to budgeting, we’ve outlined 10 practical steps below that mission-driven organizations can take to strengthen their budgeting process. 

Click here for additional resources designed to provide nonprofits with foundational knowledge to strengthen their organizations 

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