Voluntary and community groups have to ensure they have the right amount of money to fund their objectives. The costs of delivering a service or activity range from stamps and telephone bills, to hiring staff and buying buildings. Knowing and planning for these costs is essential for any voluntary and community organisation and this is where budgets and costing are vital.

A budget is a financial plan that shows income (money coming in) and expenditure (money going out) for the year ahead. It helps you to identify what money you need to raise to cover your costs. It also helps you to control your expenditure, monitor your fundraising, and manage your money.

Not only do funders want to see that voluntary and community organisations have allowed for all costs as accurately as possible, they are also unlikely to provide new money if there is a shortfall further down the line.

This overview explains the importance of a budget to your voluntary and community organisation and provides a guide to the principles of developing one.