What is a Budget – for NGOs?

“Budget” is a term that NGOs often come across when they need to plan and implement a project activity. Besides, we also come across this term again and again when we are in the process of developing a proposal. Any donor funding for NGOs is limited and a proper and planned budget is required to convince the donor to access this funding. Donor agencies also have their limitations and they distribute their financial resources evenly amongst NGOs based not only on their project plans but also according to the budget they present.

Budget, in simple terms, means a document where you specify how much money you are going to spend (in other words, expenditure), especially if your organization has received grants. In some cases, as in businesses, budgets can also include the money that the organization is going to generate or “income.” The latter is important for all NGOs now because managing any organization, including an NGO does not mean just spending – we also need to look at how costs can be covered and money can be saved for other activities.

In another sense, budget is all about planning your expenses and saving your costs.

Many NGOs tend to plan out a budget only when they need to develop a project proposal for a donor agency.  Besides, they only think of the short term project needs – not about the long-term sustainability of the organization.