The Budgeting Process: Introduction

The budget process is the way an organization goes about building its budget. A good operating budgeting process:

• is driven by mission priorities, strategic planning initiatives, and fiscal accountability,
• includes adequate investment in infrastructure and core support activities,
• engages those who are responsible for adhering to the budget in the creation of the budget,
• provides adequate time for research, review, revisions, and participation and feedback from the finance and fundraising committees, etc. before the budget is ready for presentation to the full board,
• is characterized by realistic projections for revenue and expense, and
• is revenue-based (realistic revenue projections set the limits on expenses).

Below are steps toward creating a good budgeting process and timeline.

1. Decide who should be involved and when.
2. Establish an annualized timeline that includes specific tasks, responsibility assignments, progress markers, and deadlines.
3. Ensure that budget line items and accounting line items are in sync.
4. Develop worksheets, templates, and tools that promote inclusion of all relevant budget components and that can facilitate "what if" scenarios.
5. Adopt policies for adhering to budgets, handling variances, setting guidelines for approval requirements, etc.

Return to the Budgeting & Financial Planning Introduction  page for other content and downloadable resources pertaining to budgeting.