Business Resources: Budget Approval Process

We all know that whoever is in charge of the money in an organization holds a lot of power. Originally, our Executive Director (ED) just did the budget every year. Over the last few years, we’ve been developing a collaboratively-oriented budget process. It’s not an entirely consensus-based process; the ED is still ultimately in charge of the budget. But our goal is to increase transparency and shared leadership around budgeting.  

The first thing we did is to figure out who is involved in this process. Currently all staff are welcome to participate in and observe the process but only department heads vote.  

Our process usually involves 2-3 meetings.  

  • Scoping meeting(s)

    1. In the first meeting or set of meetings, we scope out budget hopes and dreams for  the next year. Sometimes this is a conversation all together, and sometimes we do this 1:1. This year we asked each department director to generate a list of hopes and dreams for the upcoming year.  

  • State of the union meeting

    1. In the State of the union meeting, the ED presents what we know: how much revenue we’re expecting, how much we think things will cost, e.g., how much will it cost us to give everyone a raise across the board?  

    2. Voting staff take some time to rank their priorities, both for the org as a whole (e.g., pay raises) and for their departments. The ED takes those rankings and builds a proposed budget.  

  • Proposed budget meeting

    1. The ED shares the proposed budget with the group and answers questions.  

    2. Voting staff vote on the budget using fist-to-five. Everyone must vote 3 or higher for the budget to pass. If the budget doesn’t pass, then the ED discusses, revises budget, and staff votes again.

This process is still evolving; we modify it each year. So far, this process has meant that staff have a better sense of what resources are available and what tradeoffs are involved in the overall budget. 

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