A Modern Nonprofit Podcast · The Charity CFO, LLC

Episode 129: Why nonprofits need budgeting AND forecasting: and what’s the difference

June 24, 2025·38 min·3 clips

David Steffens explains why a budget is just a starting point, but a forecast lets nonprofits adapt to real-time changes.

This episode features host Tasha Anderson and guest David Steffens, the Assistant Director of Client Services at The Charity CFO, discussing financial planning for nonprofits. Steffens is a CPA with extensive experience in nonprofit audits, budgeting, and financial reporting. They clarify the distinct roles of an annual budget and a recurring financial forecast. A budget is a fixed annual plan for expected revenue and expenses, approved by the board and used as a benchmark. A forecast is a dynamic, regularly updated document that responds to real-time changes like funding cuts or new programs. The hosts reference The Charity CFO's Financial Principles, specifically points 12 and 13, which advocate for both an annual budget and cash flow projections. They note common budgeting mistakes, including unrealistic revenue targets and failing to involve program and development teams in the planning process. A key insight is that a budget-to-actual report only shows past performance, while a forecast explains the future implications of those results. They emphasize that accrual-based budgets often don't reflect cash flow needs, such as loan payments or capital expenditures, which a forecast can capture. The conversation includes a story about an executive director who discovered a major balloon loan payment not accounted for in the annual budget. Steffens advises starting a simple cash flow forecast by converting the budget to a monthly view and updating it with actual figures. The tone is conversational and educational, aimed at demystifying financial jargon for nonprofit leaders. This episode is ideal for nonprofit executives, board members, or finance staff seeking practical strategies to improve financial management and sustainability. Listeners who are content with basic budgeting and not facing cash flow complexities might find the level of detail unnecessary.

As heard by us

A practical, low-fluff take on budgeting and forecasting for nonprofit teams.

This episode treats budgeting and forecasting as day-to-day nonprofit work, not finance theory. Tasha Anderson and David Steffens keep coming back to the frictions that matter: revenue gets better when development is part of the discussion, and expense planning gets clearer when…

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Why you'd press play

Stop treating budgeting and forecasting like the same move.

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