In order to build a new budget, here's the basic approach we use. First we need to know how much money we have on hand at the start of our fiscal year (Aug 1). That becomes our beginning balance. Then we look at how our fundraisers did last year compared to our budget last year. Depending on how they did, any unusual circumstances, and other "gut feel" factors, we'll assign a projected net profit. We tend to budget conservatively so our income numbers are a little lower than what we really think deep down. We add the beginning balance to all our net income and we know how much $ we expect to have this year.
Next we make a list of all the programs and activities we are going to fund for the year. In our PTO, there's about 25 different categories and they really don't change much year to year. We assign planned expense budgets to each category, including $2000 to our bylaw-mandated carryover budget so we'll never spend to zero. If we have more income than expenses, we come up with plans to spend more money (and vice versa). We keep working on it until the income and expenses balance.
As much as possible, we base all budgets on something valid like actual past experience or mathematical calculations (ex: we expect to sell 10 dozen bagels each week for 25 weeks and make 13 cents per bagel so we expect to earn a total of 10x12x25x13 = $390).
If you're just getting started and don't have actual history to draw from, you can budget by percentages: We hope to earn $5,000 and we want 25% to be spent on enrichment activities, 25% on building improvements, and 50% on community outreach.
At our first meeting, we present the budget for approval. Some treasurers are comfortable just reviewing the line items, others have used pie charts to help simplify the data and make it more visual. Though it is fairly tedious, we go through line by line and explain the rationale for every budget to our members. Once we have approval, we can conduct financial transactions. And since our budget is so detailed, we almost never have to vote on spending decisions at another general meeting -- they are all pre-approved at the first meeting.
....getting off my soap box now [img]smile.gif[/img]
we generally keep the budget for the second meeting , seems like there is so much to do at the first meeting and it is overwhelming! Also by then we have had our big fundraiser so we can kind of see what direction the year is going in! We look at it throughout the year and generally after every event it is compared to the events cost sheet.
"When you stop learning you stop growing."
Is it common to use percentages for a budget or numbers from last year? What would be a "normal"
percentage for items? Does anyone have a sample budget to share? This email address is being protected from spambots. You need JavaScript enabled to view it.
I'm doing both if that makes sense. I used last years figures from the fundraisers to base everything upon. I did use basic expense titles and lumped some things into one grouping so it didn't get too extensive for the parents to read. I used a Microsoft program and it broke everything down percentage wise for me. I just entered in the figures and it broke it all down.
I can't believe our PTO has never presented one to our parents. I kind of found that odd. Parents want to know where their money is going too.
Cindy
Cindy<br />
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<br>"People have the right to be stupid, but some abuse the privelege."
