Budgeting is about making plans for the future, implementing those plans and monitoringrnactivities to see whether they conform to the plan. The purpose of this study is to evaluate therneffect of budgeting and budget monitoring practice in NGOs operating in Ethiopia. The studyrnfocused on budget development, monitoring and implementation activities undertaken during thernproject cycle periods. To achieve the objectives of the thesis, convenience sampling method wasrnused and selected twenty charity organizations. Managers of the sample organizations wererncommunicated to identify the key staffs that are responsible in the budgeting process accordingrnto the structure of each organization. 81 staffs are taken as respondents from Program, Financernand support service departments of the organizations out of 102 staffs who were recommendedrnby the organizations managers. A self-administered questionnaire was distributed tornrespondents. Secondary data was also collected from budget performance reports, financialrnstatements and manuals. As the findings show, the overall budgeting system in the samplernorganizations missed the participation of concerned staffs. Participation of staffs in budgetrndevelopment helps to achieve the purposes of budget such as coordination, communication andrnmotivation in the process of achieving the expected performance level. So it is recommended thatrnthe charities should participate concerned staffs in budget development, budget monitoring andrnimplementation.rnKey words: Budget preparation, budget monitoring and Budget implementation