Nonprofit Budgeting: Cash Flow Projection

In this series of posts, we’ve discussed some beneficial information regarding how to manage budgets for nonprofits. Our last post covered how to understand them in depth, and equally important is how to project your cash flow to determine when and where your money will come from. As we explore how to project the cash flow, secure your client’s operation with a Nonprofit Liability Insurance program.

What is a cash flow projection?

This spreadsheet will give your clients notice on what expenses they have coming up, and where the money for those expenses will be coming from and when they’ll receive it. These budgets should be examined at least each month, but weekly is also recommended.

Why do I need to make a cash flow projection?

Many grantmaking organizations and donors will want to review a budget before contributing. However, this document is mainly intended for your clients to keep their organization is great financial health. If they need to request a loan later on, these projects will play a huge role whether they are approved.

How to make projections.

To set up a cash-flow projection, begin with a copy of your budget and add details to the names of all the various categories. For instance, under “Foundation Grants,” write down the names of every foundation from which you now receive money and of any from which you anticipate receiving a grant. Add the same kinds of details for your expense categories.

Within each line listed from the first step, go through and make projections for expenses during that month. Include rent, utility increases, taxes, and any other expenses. Then, compare this final figure with the amount of money the organization had to begin with.

Place this figure in a “Balance Forward” row as the first income item for your first month period. Add it to all the income for that month and subtract that month’s expenses.

The difference gives you the next “Balance Forward” amount that belongs at the top row for the next column of income for the next monthly period.

About Domenick & Associates

At Domenick & Associates, we have a unique understanding of the nonprofit sector and how to properly secure your clients’ operation. From personal and advertising protection to volunteer coverage, we offer a range of products that are necessary for their success and longevity. For more information about our products, contact our experts today at (215) 629-5701.

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