A budget is the foundation of success for any nonprofit, and that includes Parent Teacher Organizations (PTO) and Associations (PTA). Budgeting provides the necessary framework for decision-making and ensures resources are allocated efficiently to achieve your goals.
MoneyMinder is now offering free PTO and PTA Guides, and one of those is a complete guide to PTO and PTA budgeting. Check those out for detailed information, but in this blog we will cover the mathematic formula to help you create a budget that empowers your parent group to make an impact.
Whether you are enhancing classroom technology, upgrading gym equipment or improving playground safety, a well-crafted budget serves as a roadmap. By quantifying your goals and assigning costs to each activity, you can gain clarity on how much money you need to raise to achieve your goals. Here’s how to start.
The Budgeting Formula, Explained
To calculate the total funds needed for your PTO or PTA budget, use this formula.
1. Start With the Cost of the Proposed Services
Begin by estimating the total cost of the activities or services your parent group aims to undertake within the upcoming budget cycle.
2. Subtract the Carry Forward From Last Year
Take into account any remaining funds or deficits from the previous fiscal year that will impact the current budget.
3. Add the Carry Forward to Next Year
Factor in any surplus funds from the current budget year that you plan to carry over into the next year.
4. Add a Little Wiggle Room
Allocate a certain contingency amount, aka wiggle room, to cover unexpected expenses or adjustments that may arise during the budget year.
5. Add Restricted Funds From Prior Years
Include any specific funds from previous years that are earmarked or restricted for certain projects or purposes.
6. Calculate the Total Funds Needed
By applying this formula, you can ensure a comprehensive approach that considers both ongoing commitments and future needs, while allowing the flexibility to accommodate for unforeseen circumstances.
Effective budget management is key to the success and sustainability of your Parent Teacher Organization. Implement this budgeting formula to empower your PTO or PTA with a structured financial plan that supports your mission and vision, while fostering transparency and accountability in resources allocation.
When do you budget? Who is on the budget team? How much wiggle room should you add? Get answers to all of these questions and more when you grab your free copy of the Complete Guide to Budgeting for PTOs and PTAs.
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