Putting together a budget is the best way of setting out your group’s plans for the forthcoming year in financial terms.

It makes sure you have thought about the costs of what you want to do, and helps you plan for future activities.

Budgeting should be part of the overall financial management of your group. It is important to ensure your group or organisation has the resources needed to meet its objectives and your budget enables you to predict the funding you will need.

You should prepare a budget before you make any funding applications. Don’t wait for the grant application form to arrive: you may well have to fill them in quickly, and funders will be looking at your financial planning and record-keeping including previous accounts and bank account details.

Always allow a contingency sum, normally 5-10% of the total capital budget, for unforeseen events, and include for recommended annual and monthly maintainence inspections, repair labour costs and spare part costs in your revenue plan. The more succesful and popular the project, the quicker you will have to replace worn out items.

You can always add an extra item to the scheme at the end if the contingency money is unspent. And be cautious when it comes to up front or part payments for uncompleted works; the Association of Play Industries can provide a list of reputable member companies.

Play England's publications Design for Play and Managing Risk in Play Provision, have essential guidance for everyone. 

Your budget should include details of your income and expenditure. This simply means all the money that comes into your organisation and all the money you spend, including anticipated future income and expenditure. This may include capital costs (larger items that have more than one year’s useful life and could be sold in the future, for example: computers, land, furniture and equipment) and revenue costs (the costs of running your project or organisation on a day-to-day basis, for example: staff salaries, volunteer costs, telephone bills, rent, stationery).

It is also good practice to include ‘in kind’ contributions towards your project including donated items and volunteer time. Don’t forget to include accounting and auditing costs in your revenue expenditure.

In summary, sound financial management is the key to sustainability. It will help you plan and allocate resources, sort out who’s accountable for what, and provide information for funders. It will also be useful for preparing grant applications and reporting on the use of existing funding, and if you have managed your finances carefully you are more likely to be funded in the future.

More and more funders are asking for business plans to be included with applications. For them it establishes a need for the service or activity you want to provide and your competence in providing it.

There are several national organisations that provide information and advice on budgeting and financial management for voluntary and community groups and organisations. You are also advised to contact your local Council for Voluntary Services (CVS) for advice. To find your local CVS visit the directory page of the NAVCA website.
 

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