Fundraising for Social Change, 8th Edition

chapter TWENTY‐NINEDeveloping a Budget

The first step in creating a fundraising plan is to develop a working budget. In its simplest form, a budget is a list of items on which you plan to spend money (expenses) and a list of sources from which you plan to receive money (income). A budget is balanced when the expenses and income are equal; an ideal budget projects more income than expenses. Budgets are usually prepared annually. Many organizations also create financial projections going out two or three years that allow them to see how money spent in one year might not be recouped until the third year, or to take into account the end of a multiyear grant.

There are many ways to prepare a budget. As organizations grow, they may change their budget preparation methods a number of times before finding one that gives them the most accurate projections. In some organizations a single staff member prepares the entire budget and presents it for board approval, but this is a large burden for one person. Therefore, the method presented here assumes that a small committee will undertake the budget‐setting process. This committee can be a standing finance committee of the board, which would then be in charge of monitoring the budget, or it can be an ad hoc committee of two or three board members and a staff person. Many grassroots organizations lack expertise in developing budgets, so they recruit someone who has that experience onto their budget committee. It is particularly helpful to ...