2025 Trends in Nonprofit Budgeting: What’s Changing and How CFOs Can Lead

The days of static annual budgets are over. Nonprofits are entering 2025 with a new reality: agility, collaboration, and real-time insights are no longer optional—they’re essential. As economic shifts and donor expectations evolve, nonprofit CFOs are stepping into expanded roles, balancing operational precision with strategic foresight. The focus is on not just managing resources effectively but also rethinking budgeting as a tool for driving mission impact. 

Here’s a closer look at the key trends shaping nonprofit budgeting in 2025, with insights from two of our valued VAR nonprofit customers: April Bacon of Wipfli LLP and Beth Larsen of JMT Consulting.

5 Budgeting Trends Shaping Nonprofits in 2025 

1. Evolving Roles: CFOs as Strategic Leaders

In the past, the CFO’s role in nonprofits was largely operational, focusing on precision and compliance. However, Beth Larsen, VP of Client Advisory Services at JMT Consulting, highlights that this role is shifting toward strategic leadership.

Boards and CEOs now expect CFOs to:

• Deliver insights that align financial plans with the organization’s strategic objectives.
• Analyze fixed vs. variable costs and the net results of individual programs.
• Guide resource allocation to maximize mission impact.
  
  

This evolution is also echoed by April Bacon, Senior Manager at Wipfli LLP, who notes that CFOs are increasingly focused on integrating data from multiple systems, such as ERP and CRM platforms. These integrations provide a comprehensive view of organizational performance, enabling finance leaders to make informed decisions quickly and effectively.

2. The Rise of Reforecasting as a Necessity

The traditional “set it and forget it” approach to budgeting is rapidly becoming obsolete. As nonprofits contend with economic uncertainty, fluctuating funding sources, and shifting priorities, reforecasting has emerged as an indispensable tool.

Reforecasting allows organizations to adjust their financial plans to accommodate changes in revenue streams, donor behavior, and program needs. Whether conducted monthly, quarterly, or mid-year, reforecasting offers nonprofits the flexibility to:

• Respond to new funding opportunities or unexpected expenses.
• Adjust program budgets to reflect real-time data and evolving priorities.
• Enhance decision-making with updated assumptions and scenarios.

With all the variables nonprofits face today, having tools that enable quick pivots without rebuilding the entire wheel is essential. In 2025, nonprofit CFOs should focus on adopting systems that streamline reforecasting, ensuring both agility and accuracy.

3. Collaboration in Budgeting: A Top-Down Meets Bottom-Up Approach

Collaboration is becoming a cornerstone of effective nonprofit budgeting. Traditionally, budgets were developed using either a top-down approach, where leadership dictated priorities, or a bottom-up approach, where department heads submitted their needs.

In 2025, successful nonprofits are finding a balance between these two approaches: 

• Top-Down Insights: Leadership provides overarching goals and strategic direction.
• Bottom-Up Detail: Program managers contribute granular, on-the-ground insights.

This hybrid model fosters meaningful conversations and helps eliminate biases, resulting in more accurate and actionable financial plans. Collaborative budgeting tools, like those provided by Martus Solutions, enable nonprofits to engage stakeholders at every level, facilitating a unified budgeting process that aligns with organizational goals.

Must-Read Guide ➡️ Nonprofit Collaborative Budgeting: Harnessing Teamwork 👀

4. Technology’s Role in Budgeting Transformation

The adoption of cloud-based, integrated budgeting solutions is revolutionizing how nonprofits manage their finances. Advanced tools enable organizations to:

• Consolidate budgets across multiple departments and programs.
• Integrate data from ERP, CRM, and other systems to create a single source of truth.
• Generate real-time reports for greater transparency and accountability.

April highlights the importance of these integrations, noting that when metrics are right and available, a go-forward roadmap practically draws itself.

As nonprofits enter 2025, investing in technology that simplifies budgeting processes and enhances collaboration will be essential for success.

5. Security and Scalability in Budgeting Tools

As nonprofit finance teams embrace digital transformation, security and scalability are top concerns. Key considerations for selecting budgeting software include:

• Compliance: Does the platform meet SOC 2 or similar security standards?
• User Access Controls: Can permissions be customized to ensure appropriate data visibility?
• Scalability: Does the solution support multiple budgets, scenarios, and forecast models?

These features ensure that budgeting tools not only meet current needs but also adapt to the organization’s growth and evolving priorities.

Preparing for 2025: Budget Smarter, Act Faster

The future of nonprofit budgeting is dynamic, collaborative, and technology-driven. By embracing these highlighted trends, nonprofits can navigate uncertainty while maximizing their impact.

As Beth aptly states, “Finance leaders must capture financial information in ways that enable critical business decisions now and in the future.” For nonprofits entering 2025, the key to success lies in leveraging these trends to build robust, adaptive budgeting practices that align with their mission and vision.

Tools like Martus Solutions can provide the agility, security, and collaboration needed for nonprofits to simplify and enhance their budgeting processes and thrive in the year ahead.