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Definitions
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What is a budget?
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A budget is an approved financial plan for the fiscal year, based on a set of assumptions. It includes Revenue and Expenses.
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Nonprofits will need their Board to vote to approve their budget for the upcoming year.
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What is a forecast?
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Once the year gets underway, we have more information about confirmed and likely Revenue and Expense.
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Unless there is a substantial change, reflecting a major new direction for the organization, the approved budget remains the same.
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Mid-year it's helpful to combine your actual Revenue and Expense with new assumptions about how the financial picture will look by year end.
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This is the forecast, and it will be a more accurate financial plan to manage towards for the rest of the year.
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