An introduction to financial planning and budgeting from Mango, the leading non-profit that helps NGOs do more with their money. This is the second in a series of slideshows that introduce the essentials of financial management for NGOs.

1. Financial management
for NGOs
Financial planning
“Failing to plan is planning to fail“
www.mango.org.uk

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Did you know that there are
4 essential building blocks
in a strong financial management
system?

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This is about keeping an accurate
and complete record of all financial
transactions – for accountability
and transparency.

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We have to plan ahead to make
sure we have the money we need
to achieve our objectives, now and
in the future.

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This is about keeping track of
progress against our plans and
sharing how we are doing with key
stakeholders.

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We have a duty to protect our
financial resources and staff from
internal risks such as accidents,
theft and fraud.
We do this by implementing a
series of commonsense
controls and checks.

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 This slideshow
looks at the
financial planning
process.

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So what does the
financial planning
process involve?

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Take a moment to write
down 3 things that financial
planning involves before
moving to the next
slide to see our ideas ...
Go on
when
ready

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 Operational
budgets
Long-
term
Short-
term
T i m e f r a m e
 We need budgets for all operations:
projects, programmes, central
support. Budgets can be for any
period of time, typically one year.

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 Fundraising
plans
Long-
term
Short-
term
T i m e f r a m e
 Fundraising plans set out
where we hope to get the
money we need to support
our operations over a 1 to 3-
year period.

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 Financing
strategy
Long-
term
Short-
term
T i m e f r a m e
 A financing strategy is a
long-term plan (3 to 5 years)
which sets income and
reserves targets and sets out
how they will be achieved.

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 Monitoring
budgets
 Forecasting
cash needs
Long-
term
Short-
term
T i m e f r a m e
 Contingency
planning
During programme
implementation, financial planning
continues, eg with monthly cash
forecasts, budget monitoring and risk
management.

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T i m e f r a m e
 Financial planning is all
about planning to use
money well – now and in
the future.
 Operational
budgets
 Financing
strategy
 Fundraising
plans
 Forecasting
cash needs
Long-
term
Short-
term
 Monitoring
budgets
 Contingency
planning

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Review
Receive &
spend project
funds
Set your
budgets
Compare the
budget with
actual activity
Take action as
needed to get
back on track

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 In your experience, what
makes a great budget?
Make some notes and then
see if you agree with our
ideas ...
Go on
when
ready

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 User friendly: clear information, easy to
read
 Accurate and complete: include all costs
associated with the project or activity,
no errors
 Fit for purpose: the right level of detail
for the reader.
The best budgets are:

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Top tips on how to
create great
budgets

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 Get all the information you need
ready in advance, eg activity plans,
quantities and prices
 Start early and allow time for
reviews and revisions.
1. Be organised

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2. Work as a team
 Don’t leave the budget-setting to
the finance folk!
 The best budgets are written with
the help of those who will use
them.

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 Write down your budgeting
assumptions, eg inflation and
exchange rates used
 Attach price quotations
 Ask yourself: would other people
be able to understand my budget?
3. Keep clear notes

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4. Clear and justified
calculations
 Use a budget worksheet (see next
slide) to create a clear and detailed
budget, showing all calculations
 Research prices, don’t make them
up!

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The layout of a budget worksheet
Check out Mango’s Guide to Financial Management for a
detailed example

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5. Include all costs
 Make sure you include all costs
associated with the project, both
direct and shared costs:
• Eg Staff recruitment & training,
employer’s taxes, Board expenses,
maintenance, central support
contribution ...

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6. Find a ‘budget
buddy’
 Get someone to check your budget
before you send it off – it is too
easy to make a calculation error or
to leave out something important.

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Want to lean more about budgeting?
Then join us on one of our practical and fun
courses soon.
Budgeting essentials eWorkshop now available!
http://www.mango.org.uk/training
training@mango.org.uk

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Find out more about Mango
and free resources for NGOs
http://www.mango.org.uk/Guide