You’ve got a great idea for a project, but when it comes time to talk about money, maybe you feel a little lost. Trust us, you’re not alone. Here are some things to keep in mind when submitting a budget with your application.
What is a budget?
A budget is a forecast of financial activity that:
Shows income - money coming in - and expenses - money going out - and the difference between the two, also known as the “Net”.
Shows those income and expenses over a set period of time.
Rather than thinking about your budget as a math problem, think about it as a tool to plan for the future. You may be dreaming about creating a performance, or holding a series of workshops, or applying for funding to finally get that community art project up and running. In all of those scenarios, you’ll need to plan what you’re going to do and how you’re going to do it. Talking or writing about your project or proposal is one way to capture this info. A budget is another way.
Here’s an example: if you’re planning to create a performance that will, eventually, have an audience, one of the first things you might need is a rehearsal space. You’ll also need a performance space. You’ll need someone to perform it. You may need technicians to run lights and sound. You may need designers for costumes, lights, scenery, etc. All of those elements have costs attached (including paying yourself to project manage and/or perform), so those costs would go on the expenses portion of your budget. Once you have a rough idea of what costs you’ll have, you can look at what kind of income you’ll need to cover those costs.
You may think, “I have no idea what kind of income I can get! My grandma said she’d give me $20, but that’s it.” It’s ok not to know. In fact, most organizations, for-profit and not-for-profit, are making an educated guess when it comes to their income and expense projections, knowing that the numbers will shift with time.
If you’re just starting out, do some research on available grants or funding sources, then make a list of those that might be a good fit for your project. Plug those amounts - and any other income sources - into the income section of your budget, knowing that they may change. You may not get all the income you want, but you can’t hit a baseball you didn’t swing at, so swing away!
Audience is Key
Who is it for? Yourself? A funding organization? Your friends and family? If the budget is for you, you might include a lot more detail than if you’ll be handing this to a funder or family member.
In most cases, you'll want to adhere to a simple structure like this. Separate the info into two sections - income and expenses. For each section, make two columns. In one column, write the income source or expense name. In the other column, write the amount. Subtract the expense total from the income total. That amount is called the “net”, and this goes at the bottom of your budget. Hopefully, the net is “0” or a positive number. If it’s negative, you’ll need to adjust either your expenses or your income to get your budget to “0” or a positive number.
As you start to fill in your budget, you might think, “How do I know if I’m making an educated guess? I’m just writing down numbers!” We like to recommend that artists ask themselves two questions: One, “What would I do with this project if I had all the funding I needed?” and two, “What’s the bare minimum I need to make this project happen?” Number one is what we call the “Blue Sky Budget, and number two is what we call the “No Snacks Budget”. Your budget will probably fall in between these two extremes.
If you calculate the net and find you have a large surplus, and your project is not-for-profit, go back over your expenses to see if there’s an area that’s underfunded. You may find you can pay your artists more or pull some portion of the project out of “No Snacks” Land into a more realistic and comfortable space.
Pro-tip: You never want to share your “No Snacks Budget”. No one else needs to know that you can do your project for $100 and a pack of chewing gum, because that budget often means that the artists involved (including yourself) won’t get paid for their time and energy. You do want to be able to share your “Blue Sky Budget” because you never know who can give you that funding.
Finally, keep in mind that budgeting is not the time to be timid. Be ambitious and practical in your planning. It’s important to identify your hopes and ambitions for the project and have a rational set of numbers to back up how you’re going to do it. Don’t let uncertainty hinder the scope of your vision.
We hold monthly info/Q&A sessions for Incubator on the fourth Wednesday of every month at noon. For March 2020, we'll be holding this meeting via Zoom. Let us know if you'd like to attend and we’ll send you info on how to connect. Members and non-members alike are welcome.