Budgeting 101

“Oh, God, do I have to make a budget? I didn’t get into this business to make budgets. I want to make programs, not budgets!”

These producer questions remind me of the child’s question to her mother: “Do I have to brush all my teeth?” The mother gently responds, “No, honey, only the ones you want to keep.”

Producers always imagine that making budgets is some onerous bureaucratic task invented by management to torture creative minds. But, I have a different explanation. The reason for doing a budget is to avoid forgetting costs that will later rise up and bite you, the producer, in the ass! If somebody is paying to finance your program, you know he/she isn’t going to give you more money when you suddenly “remember” a cost you’d forgotten about in the beginning. When this results in your going over budget, you’re going to be forced to eat the cost, which of course is also true if you’re financing a program yourself. A budget, therefore, is a giant and crucial producer “reminder” device.

Here’s another thing. There is no uniformity of budgets or even of categories of allowable expenses. Different funders have different rules. And the same funders treat different applicants … differently. The big guys, the WGBH’s and NPR’s, PRI’s and APM’s and TV stations, for example, always remember to charge for overhead. Indies routinely don’t, as if the costs for those kinds of expense come from the IF Department: the “Department of Imaginary Funds.” That’s why the big guys get and stay big, and you know what – nobody tells them they can’t charge overhead, which is up to 20+ % of their production budget – in addition to the budget itself. But, guess what. When the little guys DON’T CHARGE OVERHEAD, nobody tells them they should! Same thing with “contingency.” So, if you want to take all of the risk of your production on your own shoulders – “help yourself” and ignore overhead and contingencies in your budgets. (How to charge for both “overhead” and “contingency” is described in detail below.)

So, a budget serves two purposes: it estimates what a project is going to cost and tells you how close you came, and it collects information so you don’t forget anything. Over the years, the budgets I developed for projects kept trying to remember more things. For example, if you have employees, don’t you need desks, computers, telephones and office supplies? Is there a way to standardize what this kind of support costs? And then, could the program count the number of employees and automatically calculate the right level of support? The purpose was to avoid sweeping any cost under the table, and then having it come out and bite you later on.

OK, but how? Check out my article on Transom.org for details on how to make a budget. And, if you need more detailed budget assistance, please contact me directly at [email protected] or (919) 942-6950.

 

Leave a Reply

Your email address will not be published.