Budgeting for Impact: How FP&A Helps Nonprofits Plan Smarter

TL;DR for Nonprofit Finance Leaders

• FP&A helps nonprofits move from static, spreadsheet-based budgets to scenario-driven financial planning.

• It’s especially valuable when you manage multiple programs, restricted funding, and frequent leadership questions.

• The biggest return isn’t just better numbers—it’s faster answers, fewer errors, and more confident decision-making.

For nonprofit organizations, budgeting plays a central role in mission delivery. Finance teams are asked to balance program needs, staffing decisions, funding restrictions, and board expectations—often with limited time and resources.

Many organizations still rely on spreadsheet-based processes to manage this complexity. While familiar, those approaches can become difficult to maintain as organizations grow or face more frequent change.

During our recent webinar, Budgeting for Impact, nonprofit finance leaders discussed how Financial Planning & Analysis (FP&A) supports more responsive budgeting, clearer forecasting, and stronger collaboration across the organization.

Perspectives from Nonprofit Finance Leaders

This article draws on insights from our recent webinar featuring:

Carmela Caplain

Senior Vice President of Finance, PRISMA Center for Jewish Day Schools

Leads financial strategy and budgeting for a $9M organization with a lean finance team.

Richard Hetherington

Vice President of Accounting Services, Kiwi Nonprofit Services

Has provided CFO and advisory services to over 60 nonprofit organizations.

Barry Birnbaum

Senior Consultant, Kiwi Nonprofit Services

Advises nonprofits on ERP and budgeting systems.

How FP&A Supports Nonprofit Financial Planning

FP&A provides a framework for connecting budgets, forecasts, and actuals throughout the year. For nonprofits, it helps finance teams answer practical questions as conditions change.

Common uses include:

• Updating forecasts as funding, staffing, or program plans evolve

• Tracking restricted and unrestricted funds with greater consistency

• Understanding program-level costs and shared overhead

• Running scenario analyses before decisions are finalized

• Preparing timely, consistent information for boards and leadership

  
  

As Barry Birnbaum noted during the webinar:

“FP&A is a strategic tool. It supports scenario planning and collaboration so leaders can understand the impact of decisions before they’re made.”

Where Spreadsheet-Based Budgeting Becomes a Constraint

Spreadsheets remain widely used in nonprofit finance—and in many cases, they work well. Challenges tend to emerge when organizations reach a level of complexity that makes manual processes harder to manage.

Finance leaders often cite:

• Large numbers of linked worksheets and manual consolidations

• Time spent validating formulas instead of analyzing results

• Difficulty updating forecasts during the year

• Delays in responding to leadership or board questions

  
  

Carmela Caplain shared her experience:

“I inherited a manual budgeting process with 50 worksheets. Consolidation was painful. Moving to an automated process was a very welcome exercise.”

She added:

“We spent so much time checking formulas that we had less time to look at the budget strategically.”

Practical Scenarios Where FP&A Adds Value

Funding Changes

When grant funding changes or new funding becomes available, FP&A tools allow teams to model multiple scenarios quickly and show leadership the implications for staffing, programs, and cash flow.

As Barry summarized:

“Without data, decisions rely more on assumptions. FP&A helps ground decisions in current information.”

Unplanned Expenses

Regular budget-to-actual tracking helps teams identify variances earlier, making it easier to adjust plans without last-minute disruptions.

Cash Flow Timing 

FP&A supports cash flow forecasting, helping nonprofits anticipate timing gaps and communicate clearly with boards and finance committees.

Supporting Better Collaboration Across Teams

FP&A can also reduce friction between finance teams and program leaders. Shared access to current reports and dashboards allows managers to monitor their budgets without relying on custom reports.

Richard Hetherington explained:

“Giving program managers access to real-time reports empowers them and saves finance teams hours of work from ad hoc requests.”

What Nonprofits Often Experience After Implementation

Organizations using FP&A frequently report:

• Shorter budgeting and reforecasting cycles

• Fewer manual errors and reconciliations

• Faster scenario analysis for leadership discussions

• More consistent, board-ready reporting

Carmela confirmed:

“Since implementing our FP&A tool, we cut our budgeting cycle in half and gained the ability to do scenario planning and program-level reporting.”

Richard added:

“With FP&A, I can change a hire date and instantly see the impact on the budget’s operating surplus. That’s revolutionary compared to the old spreadsheet method.”

FP&A also supports workforce planning by allowing teams to model staffing changes, benefits costs, and program allocations in a single environment.

Is FP&A Right for Your Nonprofit?

FP&A is often a good fit for nonprofits that:

• Manage multiple programs or departments

• Have complex funding structures

• Provide regular financial updates to boards or funders

• Operate with lean finance teams

Many organizations can establish an initial FP&A model in weeks, depending on data readiness and reporting needs. The earliest returns are typically seen in time savings, reduced rework, and improved clarity for decision-makers.

Ready to Transform Your Budgeting Process?

Kiwi Partners works with nonprofits to assess, implement, and optimize FP&A solutions aligned with organizational size and complexity.

👉 Schedule a brief consultation to discuss whether FP&A is appropriate for your organization, or📥

Download our FP&A Needs Assessment Checklist to clarify requirements and evaluate tools with confidence. (The download link opens a short form to access the guide.)