Budgeting
The Budget of the International Board of ELSA is a planning process, a financial document (and essential tool) that helps us organize our financial year, which goes from the 1st of August to the 31st of July. We prepare it based on our economic performance in previous years, together with the expectations for the current year, helping us to estimate the income and expenses that will be made throughout the economic period.
It is a tool that is presented to the International Council, who decides on its approval. As such, it works as a road map for the International Board's responsibility for that financial year, since they have to comply with that budget and work towards its implementation.
This tool has two main functions:
On one hand it helps us to plan, at the beginning of the year all the economic activity that we will develop, and
On the other hand, it serves as a control tool to check whether our actions are in line with the planning carried out throughout the entire financial year.
The current structure is composed by:
General Budget
General Incomes: Partnerships; Online Advertisement; Unrestricted Operational Grants; Fees.
Other Incomes: Financial Income; Previous Term General Income; Uncategorised General Income.
General Expenses: General Administration; Board Administration: Network Administration; Externals Administration.
Other Expenses: Financial Expenses; Previous Term General Expenses; Uncategorised General Expenses.
Project Budget
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STEP
How to prepare the budget
Now, let's get to the important part of this topic, how to prepare the budget.
Step 0
When it comes to preparing a budget, we all ask ourselves where we should start, and what things we should take into account. There are a couple of things we should take into consideration before preparing our budget:
We should take a step back and analyse the financial situation of our association if we need to increase our income, or we have to maintain it, or if we have previous year’s debts we need to pay for…
Another thing we have to consider is other strategies we are involved in, we have to take into account our strategic goals, and more concretely our financial strategy, how we can design our budget to comply with these goals.
Step 1
We start by making separate budgets for each of the points or activities we will prepare. Then we select one of them, and start working individually.
We start with project expenses. We write down all the expenses we have. Here we can divide our expenses generally, or by participants
Then general expenses are analysed (all those not related to any project), like bank and registration fees, web services, allowances...
Once we have all this information, we proceed to see what our organisation can achieve, with different types of funds that are coming in, and we start completing our income side:
a) Write down the income that we know we are going to have for our general income part, membership fees, partnerships we have already signed in...
b) We will do the same with our projects budgets, writing down the income we already have, participation fees, partnerships...
Once we have this income it is easy to see what we are missing, if we are ok, if the project is feasible, if we still need to search for more sources of income...
Once we have this worked out we meet with our board, and the areas responsible for each of the projects, and we discuss our strategy: can we get more partnerships, can we maybe apply for a grant, how do we prioritize the items within the budget...
Once we finish our budget, it is very important to present it to our Council, so that they can approve our financial activity for the term.
Tips n' Tricks
At this point, we have to keep in mind that there might be contingencies while developing the project, and it is recommended that we keep the contingencies above 5 or 10%.
When creating our project budget it is interesting to prepare 3 different budgets:
The first of them contains the absolute necessities to organise, meaning those we cannot find a way around, and get them for free. When selecting them, we will cover just the bare essentials, like the cheapest hostel. With this we will have a picture of the minimum costs we will have.
The second one will be a step above the first one, including nice to have things, and trying to improve the project.
The last one will include the extravaganza, ie. those really nice aspects that would make our project go the extra mile, for example, a great hotel or transportation, or even hosting a hugger gala.
Then, when we start gathering our income and analysing the whole project, we will be able to balance things from one budget to another depending on the amount of income we can gather.
Templates
In accordance with all the information provided in this page, you can find two budget templates in our officer’s portal that may help you in the process of drafting one. These templates are divided by areas, and you can introduce in each of them different projects as well as the different incomes or expenses you foresee.