Guide To Streamlining Refresher Budgets and Financial Reporting Guide

Give the Gift of Simplified Financial Requirements!

In this season of light, laughter, and giving, budgets and financial reporting are topics that can turn funders and nonprofits Scrooge-like in a flash. 

Any grantseeker will tell you that putting together specific budgets to meet the guidelines or detailed templates of funders takes a tremendous amount of time and energy. Many proposals require applicants to slice, dice, and repackage financial information into specific formats.  Some funders provide templates with ten categories.  Some ask for 20.  Some are interested in seeing all travel expenses pulled out separately.  Others may require a line item for professional development expenses.  The variety can be staggering.

All in all, grantseekers have told us that developing funder budgets is one of the biggest burdens of fundraising.  In Project Streamline’s recent report, Practices That Matter, grantseekers told us that providing financial information in their own formats was one of the practices that made the biggest difference to their sanity and effectiveness.

As I’ve said before in various rants and even a recent Nonprofit Spark podcast, budget and financial reporting templates are hugely time-consuming, create the potential for error, ignore the fact that nonprofits have financial systems that generally work for them, and can mask a lack of financial systems capacity.  Project Streamline recommends doing away with templates.

Our Guide to Budgets and Financial Reporting lays out some basic principles for grantmakers to consider:

  1. Use the information that nonprofits already have:  Nonprofits use budget and financial report formats that fit into their financial systems, yet funders regularly ask them to slice and dice their financial information into funder-specific formats.  Using nonprofits’ existing materials can not only save nonprofits time and add to the “net grant,” it can also give you important insight into a nonprofit’s financial sophistication.
  1. Align grant schedules with the grantee’s timing, not the funder’s. Funders should make sure two elements of grants—grant start and end dates and reporting periods—align with the grantee organization’s fiscal cycles and project timelines. Too often these schedules are instead based on the funder’s process, regardless of what makes the most sense for the grant.
  1. Require less reporting than foundations typically require of grantees. We recommend funders follow three principles:
    1. Written reporting should generally be required on no more than an annual basis (unless there’s cause for particular concern).
    2. When a number of funders jointly support a project or program, one budget and financial reporting format should be used, and all funders should agree to accept reports in that format.
    3. The smaller a grant is, the simpler the grant budget and financial reporting requirements should be.  For general operating support grants, the organization’s 990 and annual budget should suffice.
  1. Ask only for the information you will use. Funders need to know what information to ask for and what they’re going to do with it. This guide includes  tools, tips and resources to help with this process.


Check out the guide for more details, tips, and tools related to streamlining your budget requirements.

And friends – stay tuned for next week, when we bring you something with extra zing to add to your eggnog:  what if you stopped asking for a budget and financials?  Unthinkable?  For the Unitarian Universalist Veach Program at Shelter Rock, it was not only thinkable, but, with help from Fun with Financials Nonprofit Financial Crusader, Carol Cantwell, it was also doable.

Jessica Bearman

Jessica Bearman works with foundations and other mission-based organizations, focusing on organization development, facilitation, and R&D to help them become more intentional, effective, and responsive to the communities that they serve. She is also known as Dr. Streamline. Follow her on Twitter @jbearwoman.

One Response

  1. […] funders really like templates.  But please keep them to no more than five broad categories! Get a refresher on our Budget and Financial Reporting […]

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