Certified Nonprofit Professional Practice Exam

What does a program budget specifically focus on?

1. Overall organizational income

2. Specific organizational activities or departments

3. Long-term fundraising campaigns

4. External grants and partnerships

The correct answer is: Specific organizational activities or departments

A program budget specifically focuses on the resources allocated for specific organizational activities or departments. This type of budget provides detailed insights into the financial requirements of individual programs within the organization, including costs related to personnel, materials, and activities. By concentrating on distinct programs, it enables nonprofits to assess the financial viability and sustainability of various initiatives. This focus also facilitates better tracking of expenses, aids in evaluating the program’s effectiveness, and assists in making informed decisions about where to allocate funding and resources for maximum impact. In contrast, overall organizational income addresses the total financial resources available to the nonprofit and does not drill down into specific programmatic areas. Long-term fundraising campaigns emphasize strategic efforts for accumulating financial support over an extended period, while external grants and partnerships look at funding opportunities provided outside of the organization. Each of these aspects plays a role in a nonprofit’s financial health, but they do not target the program-level financial planning that a program budget encompasses.