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Establishing a budget

A common way to prepare a budget is to present the different types of expenses (cost categories) and income (funds available, or needing to be raised) on a simple spreadsheet (e.g. Microsoft Excel). Large-scale campaigns, or specific donor requirements, may call for more complicated presentations using several interlinked spreadsheets.

What to Include in a Budget

1. Anticipated Expenses

  • Staff, i.e. everyone who is paid to work on the campaign.  A distinction can be made between direct costs (salaries) and indirect costs (e.g. taxes and insurance you pay for staff).
  • Investments, i.e. equipment purchased for long-term use in the campaign, e.g. electronic devices such as cameras and cell-phones. For effective accountability, an inventory should be prepared and regularly updated, i.e. a list detailing all equipment, where it is kept and what purposes it may be for. Written agreements should be made as to which organization keeps the equipment after the end of the campaign.
  • Operational costs, i.e. the costs directly related to running the campaign that are not staff costs or investments. Examples would be printing costs for campaign materials, billboard rental, fees for radio air-time, and transport costs for a travelling street theatre group.
  • Administration, i.e. day-to-day expenses related to campaign management (e.g. office rent, electricity, stationery, telephone bills)
  • In addition, a separate heading may detail sub-contracts, e.g. if a design firm has been hired to design campaign posters, or a consultant to write a research report.

Bear in mind: Each cost category should be as detailed as needed to keep accurate track of expenses. For example, under “staff”, each staff position should be listed separately; under “investments”, each item, or type of equipment (e.g. “2 printers”) should have its own budget line.

2. Projected Income

  • Institutional donor grants (per donor)
  • Donations from businesses, local charity, churches, professional networks and other organization that are not institutional donors
  • Donations from individuals
  • Subscriptions or membership fees
  • Profit from sale of campaign items and other income-generating activities
  • Other income

If parts of the income are raised for a specific purpose (e.g. a donor covers costs related to participate in an international conference), a distinction should be made between such restricted or “earmarked” grants, to be used exclusively towards the specified purpose, and unrestricted income, which are funds that can be used for other aspects of the campaign (i.e. overall administration, staffing, etc).

3. Actual income and expenditure

Often, the anticipated expense may be more or less than expected, or the projected income may fall short of what may be needed to implement the campaign strategy. It is helpful for a budget to also track the actual amounts that end up being raised and spent, and use this as a comparison against projected amounts. It is also a means to determine if adjustments may need to be made as the campaign progresses in terms of resource mobilization and allocation.

Bear in mind: It is generally unwise to keep changing a budget too many times over the course of the campaign. This raises the question of whether campaign planning adequately accounted for expectations of the actual resources needed to implement the campaign. However, certain factors (both internal and external) may necessitate adjusting a budget, particularly if the campaign takes place over a longer period of time – for example, a donor who has pledged a contribution pulls out, or the actual expense for communications activities was underestimated, or administrative changes take place, such as staff leaving, unanticipated increase in office rent etc. A budget should be reviewed every six months, and then adjusted accordingly if necessary, so that it continues to be a realistic projection of future income and expenses.

Important points to note when creating a budget:

  • In large and complex campaigns, it is advisable to prepare a separate budget sheet for each set of activities, e.g. for (i) formative research, (ii) production costs of TV public service announcements (PSA), (iii) broadcasting costs for PSAs, (iv) production of print materials, (v) campaign web-site design and maintenance, (vi) fundraising activities, and so forth, each sheet with its separate cost categories and any activity-specific income. A summary sheet should bring together these different sub-budgets on one page, to show overall campaign income and expenses.
  • For effective financial monitoring, the budget should be broken up into phases. For example, in a campaign lasting 2 years, additional columns in the spreadsheet could show expenses every six months for the 1st, 2nd, 3rd and 4th years respectively. For effective financial management, budgets need to be reviewed regularly and adjusted swiftly if any major changes occur, e.g. changed campaign activities or an unexpected drop in projected income.
  • All budget revisions should be formally approved by the campaign team, and distributed among all relevant stakeholders. To prevent confusion and financial mismanagement, it is essential to include the approval date on the budget sheet and to mark draft budget drafts as DRAFTS that have not yet been approved.

Sample budget template

Budget for the XYZ Campaign

Budget Version X, approved on [date]

EXPENSES

Item

Unit cost

N° of units

Total cost

Year 1

Year 2

  1. A.   Staff

 

 

 

 

 

A.1 Campaign Manager

…/month

 

 

 

 

A.2 Communications Coordinator

 

 

 

 

 

A.3 Evaluation consultant

lump sum

 

 

 

 

 

 

 

 

 

B. Investments

 

 

 

 

 

B.1 Digital video camera

 

 

 

 

 

 

 

 

 

 

C. Running costs

 

 

 

 

 

C.1 Poster printing costs

 

 

 

 

 

C.2 Travel costs

 

 

 

 

 

C.3 Location rental for events

 

 

 

 

 

C.4 Radio air-time

 

 

 

 

 

 

 

 

 

 

D. Administration costs

 

 

 

 

 

D.1 Office rental

…/month

 

 

 

 

D.2 Telephone and internet

…/month

 

 

 

 

D.3 …

 

 

 

 

 

INCOME

Source of income

Total

Year 1

Year 2

Own contribution (membership fees…)

 

 

 

Grant from donor A

 

 

 

Grant from donor B

 

 

 

Community contributions

 

 

 

Individual donations

 

 

 

 

 

 

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