Quick guide for small and mid sized Non-governmental Organizations' (NGOs'), Civil Society Organizations' (CSOs'), Community Based Organizations (CBOs'), Charities & Causes

1. To a Training Session on
Financial Management & Budgeting

2. 2
What is Financial Management?
Financial management refers to the efficient and effective management of money (funds) in such a manner as
to accomplish the objectives of the organization. It is the specialized function directly associated with Finance
department and the top organizational management.
Failing to plan is planning to fail
Essential blocks in a Financial Management System
Financial
Planning
Internal
Controls
Accounting
Records
Financial
Monitoring

3. 3Failing to plan is planning to fail
Understanding the Financial Management System Blocks
Accounting
Records
This is about keeping an
accurate and complete record
of all financial transactions –
for accountability and
transparency.
Financial
Planning
We have to plan ahead to
make sure we have the
money we need to achieve
our objectives, now and in the
future.
Financial
Monitoring
This is about keeping track of
progress against our plans
and sharing how we are
doing with key stakeholders.
Internal
Controls
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 common sense
controls and checks.

4. 4Failing to plan is planning to fail
What is Grant Management
Program/project grants are funds that are for a specific event, activity or plan within an organization that are
usually time bound.
Grants management is the phase of the grant management cycle that begins when an applicant signs an
agreement with a grantor (funder/donor) to accept a grant award and becomes a grantee.
Phases in Grant Management Cycle
Contract Review
Implementation
Reporting &
Monitoring
Grant Closure

5. 5Failing to plan is planning to fail
Phases is Grant Management Cycle
PHASE IV – GRANT CLOSURE
Tie up the loose ends:
 Use up budget within agreed timeframe
 Finalise accounts and files for donor audit
 Prepare final finance and narrative reports
 Celebrate the success of the project!
PHASE I – CONTRACT REVIEW
Assess the terms & conditions BEFORE you sign the
contact:
 Are the rules reasonable?
 Can you comply?
 What is your legal liability?
 What is negotiable?
PHASE II – IMPLEMENTATION
Set up or adapt systems to manage funds as per contract,
e.g.:
 Accounting & coding structures
 Procurement procedure
 Donor reporting routines
 Grant management meetings
PHASE III – REPORTING & MONITORING
Account for and report on project progress:
 Maintain project accounts
 Provide financial and narrative donor reports
 Request budget revisions
 Keep donors informed of variations to the plan

6. 6Failing to plan is planning to fail
What is a Budget?
A budget is an estimation of the revenue and expenses over a specified future period of time.
It can also be “A financial plan for the future concerning the inflow (grants, donations, membership fee, etc.)
and outflow (expenses) of an organization.
A budget can be made for a family, business, country or anything else that receives money to spend.
So then, what is Budgeting?
The process of creating, planning and controlling of money to spend is Budgeting.
It can also be “A financial plan for the future concerning the inflow (grants, donations, membership fee, etc.)
and outflow (expenses) of an organization.
A budget can be made for a family, business, country or anything else that receives money to spend.

7. 7Failing to plan is planning to fail
Type of Budget
TimeframeShort Term Long Term
 Operational Budget
We need budgets for all
operations: projects,
programmes, central support.
Budgets can be for any period
of time, typically one year
 Fundraising Plan
Fundraising plans set out
where we hope to get the
money we need to
support our operations
over a 1 to 3-year period.
 Financing strategy
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.
 Forecasting cash needs  Monitoring budgets  Contingency planning
During programme implementation,
financial planning continues, e.g. with
monthly cash forecasts, budget
monitoring and risk management.
Financial planning is all about planning to
use money well – now and in the future.

8. 8Failing to plan is planning to fail
Budget Management in Action?
Check
DO
PLAN
Set your
budgets
Receive &
spend
project
funds
Compare the
budget with
actual
activity
Take action
as needed to
get back on
track

9. 9Failing to plan is planning to fail
Tips on managing relationship with a donor
Maintain regular communication with the donor contact person
Meet reporting deadlines
Follow the grant rules!
Build Trust
Deliver project activities as described in the proposal
Implement the project within the agreed budget and timeframesMeet Project Targets
Don’t spend money before or after the agree contract dates
Make sure invoices and receipts are all dated within the contract datesRespect Contract Dates
Prepare accurate and complete financial reports
Explain variations from budget
Be honest in the project report – share challenges, set backs as well as
successes
Write Good Reports
Keep a file with grant contracts and correspondence
Get everything in writing especially if negotiating a variation in the contract
or budget
Keep grant files
Keep donors informed if targets or deadlines will be missed
It is often possible to negotiate for more time or moneyAvoid surprises!

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