Types of budgets

Throughout the life cycle of your project, you work with different types of budgets. Each phase requires a slightly different approach, tailored to the goals and insights of the moment. Here we explain how you get from an initial estimate to a balanced justification and how you eventually move toward a multi-year budget.

From concept to working budget

You start with a draft budget: an initial estimate of the total costs of your project. You use this to gain insight into what is needed financially to realize your plan. You also use this version to enter into discussions with subsidy providers, funds, sponsors, or other financiers.

Once you know how much funding you have actually secured, you can adjust the budget to a working budget: this is the version that will actually be used to carry out your project. Sometimes this means you have to adjust your plans slightly. For example, did you receive less funding than you had hoped for? Then you may need to reduce the number of performances or adjust the scale of your production. That's not a problem, as long as your mission, your motivation, your 'why', remains intact. Reducing a festival from ten to five days is fine—as long as you are still pursuing the same artistic or social goal.

💡 Tip: Don't forget to inform those who have already contributed financially of any changes to your plan—this will help you avoid unpleasant discussions after your project has ended.

What's behind your idea?

You have a great plan or idea that you want to implement and you believe it is really important that it be realized, but can you explain it convincingly to others? What is behind your idea, what is at its core? Especially if you are looking for backers, it is important that you can bring them into your motivation. Below are some ways to clearly explain this motivation.

From work budget to accountability

Once your project is complete, you will know exactly how much everything cost. You will then draw up a final statement: an overview of the actual costs incurred, based on the actual figures from your accounts. This statement is necessary for accountability to your financiers. You also send an explanation with this statement; are there any major changes between what you originally requested and what you actually spent? If so, explain these differences.

Components of a budget

In your budget, you make all foreseeable costs clear - including costs that you get sponsored or receive in kind. A budget is always an estimate of the total costs to be incurred, and it is important to be as complete as possible. Below is an overview of common items, including tips and points to consider.

From project to multi-year budget

In the beginning, you will mainly work with project budgets: separate budgets for each project or initiative. But as soon as you start carrying out multiple projects per year, or when your organization grows, it becomes useful to work with a multi-year budget. This requires a little more knowledge and expertise in accounting systems and administration. You look further ahead and take structural costs and recurring income into account. This is essential if you want to build a sustainable practice within the cultural sector.

Sustainable financing

Many creators and cultural organizations start their practice with incidental funding: from project to project. That is a logical and often necessary first step, but it makes you vulnerable. Sustainable funding means securing income in the longer term, for example through long-term subsidies, structural partners or a permanent place in policy programs such as the Basic Infrastructure (BIS). In this article we explore how to go down that road, step by step.

Administration

No matter what type of budget you use, good financial administration is essential. Make sure you keep different versions of your budget in a safe place and keep track of when you made any changes. Make regular backups and store everything in an organized manner. Clear administration enables you to always account for your income and expenses. The larger or more complex your project becomes, the more important this becomes. Good administration is not only an obligation, but also a powerful tool for keeping control of your project and inspiring confidence in partners and financiers—and your accountant will be grateful for it.

Financial administration

Are you working on a cultural project or initiative? Then chances are you will have to deal with funding. And therefore also with keeping good records. Whether it's grants, income from ticket sales or sponsorship money - clear financial records are indispensable.