The good, bad, and ugly of nonprofit budgeting and planning 

If you’re still using spreadsheets for nonprofit budgeting and planning, you’re not alone.  

In fact, more than two-thirds of nonprofit finance teams currently do.  

But as nonprofit organizations grow in complexity, their need for a forward-looking planning and agile decision-making solution also increases.  

We’ve seen decreases in the number of organizations relying on Excel spreadsheets for budgeting and planning.  

According to the 2024 Sage Nonprofit Technology Trends Report, the percentage of nonprofits using true budgeting and planning software increased from 18% in 2022 to 28% today. 

In this article, we’ll examine why Excel is poorly suited for forward-looking planning and how easy it is for small spreadsheet errors to become big problems.  

We’ll also explore how your budgeting and planning experience can range from downright ugly with manual spreadsheets to merely bad with outdated technology and on to good with an automated, modern solution. 

The ugly side of budgeting spreadsheets 

Managing budgets in Excel presents significant challenges to many nonprofit organizations.  

Let’s start with the most common complaints: 

• “I just pulled another all-nighter to prep for the board meeting.” 
• “Ugh. I just found a formula error that overstated our donations last quarter.” 
• “Wait. Where did that budget version come from? I was using this one to manage our department’s expenses.” 
• “John’s just left the organization. He was the only one who understood the model.” 

Those are some big blemishes to deal with.  

Imagine how much more you could accomplish if you ditch the spreadsheets to put time back into your day, eliminate calculation errors, and empower staff with version control. 

Plus, when you’re dealing with complex forecasting and what-if models, it’s risky to depend on one person.  

How much will it cost to have someone figure out how the model was built to ensure continuity? Or, what if the model had a flaw in its original creation and your team continues using it? 

With all the time and headaches associated with manual, spreadsheet-based budgeting and planning, it’s no wonder budgeting and planning ranked as one of the top five internal challenges in the 2024 Sage Nonprofit Technology Trends Report. 

The bad side of outdated technology 

Maybe your organization has a specific software solution in place for budgeting and planning and you’re feeling pretty good right now after reading about the challenges that come with spreadsheets.  

If you’re using software based on older technology, then hold that thought. 

In addition to exposure to cyber security threats, inappropriate data access, and high budget variances, organizations have many potential problems on their hands when using outdated solutions: 

• “It’s halfway through the month and I don’t have last month’s numbers from the development group yet.” 
• “When did you send that out? I can’t find that email.” 
• “Oh no. Did I just send a file that included salary information?” 

Outdated software is often a standalone solution that silos financial data.  

To share data throughout the organization, nonprofit finance professionals need to download a CSV file and share it with various stakeholders who are responsible for managing and updating their specific data in manual formats.  

These files are sent back and forth as email attachments leading to inefficiencies, errors, and security risks. 

The good: An automated, modern budgeting and planning solution 

To get away from the bad and ugly of nonprofit budgeting and planning, more organizations are choosing to adopt a true cloud-based budgeting and planning solution.  

Modern solutions provide a real-time single source of truth that supports agile decision-making and includes the capabilities needed for nonprofits to successfully plan, budget, and forecast.  

Let’s take a closer look at the good.  

Cloud-based budgeting and planning software helps nonprofits become more efficient through automation, leaving more time for in-depth analysis and strategy.  

Budget owners across the organization have the power to accurately monitor budget-to-actuals, enabling real-time decision-making.  

When budgets are in the cloud, it emboldens collaboration and ensures everyone sees the same version, which leads to a more responsive and resilient organization. 

Here’s what two nonprofits had to say when they ditched their ugly spreadsheet processes for modern, cloud-based budgeting and planning software: 

Hope Human Services 

Using Excel, Hope Human Services struggled to budget. It took two weeks of eight-hour days to get through each exercise.  

Plus, broken formulas and version control issues permeated their six-tab spreadsheet. With a cloud-based solution now in place, director of finance Shelton Horton shared: 

• “I’m cutting my budgeting time in half with Sage Intacct Planning, and we’re able to do rolling forecasts to adapt to any changes.” 
• “We don’t have to wait until the end of the month to see how things are going—we’ve got real-time data available whenever we need it.” 

FoodCorps 

Facing similar constraints with their budgeting process, FoodCorps staff had to battle data silos and communication gaps.  

After adopting a true cloud-based budgeting and planning solution, senior director of finance Michelle Emeh said: 

• “We’re able to budget more efficiently with Sage Intacct Planning and invest our time savings into analytics and strategy so senior management can make more informed decisions.” 
• “Since moving to Sage Intacct Planning, we’ve been able to spend quality time with budget owners to provide clarity and context. They’re more empowered and comfortable with the numbers.”  

Final thoughts 

For today’s nonprofits, the best way to achieve mission success is through a flexible strategic plan and resilient financial management.  

Good nonprofit budgeting and planning tools can make it possible.  

With cloud-based planning and budgeting software, nonprofit organizations benefit from the good—including time savings, cross-departmental collaboration, and real-time decision-making.  

Relying on best practices and automated processes in budgeting and planning emboldens your nonprofit to support growth and win more funding opportunities.  

Is your organization ready to say goodbye to bad and ugly for a better nonprofit planning and budgeting experience? To find out, download our 8 Signs Your Nonprofit Has Outgrown Excel for Budgeting and Planning e-book.