Budget

A budget is not a forecast of what will happen. It is a decision about what the charity intends to do with its money, taken by the people responsible for the money.

There is no prescribed format, but the budget should be approved by the trustees before the year starts and reported against during it. Trustees who receive no budget comparison during the year are not exercising meaningful financial oversight.

Pair the budget with a cashflow forecast — a charity can be solvent on paper and unable to pay a bill in March. See building your annual budget.