Wikimedia Education Greenhouse/Unit 2 - Module 4

Budgets: What resources do we need to make this successful?

Why do we need to create a budget?

Identify the statement that best represents your understanding of the purpose of creating a budget for a Wikimedia education project:

• Only to know how much money to request from a grant.
• To effectively plan the use of all my resources and anticipate potential limitations.
• To know how expensive it will be to develop my project.
• To know how much money to charge for participation in my project.
• I don't think it's necessary to create a budget for a Wikimedia education project.

Budgeting 101

Budgets as part of your project planning process

So far in this unit, you have:

• Focused on an idea for a Wikimedia education project you want to develop/are developing
• Conducted a needs assessments of the problems (causes and effects) that your project is addressing
• Developed a logic model for your project that resulted in defining the activities and impact of your project
• Identified stakeholders and their power and interest in your project

That's a lot of great work and you should feel very proud of yourself! 👏🏻👏🏼👏🏽👏🏾👏🏿

Next we will be taking one more step in the project planning process and look more closely at budgets. Let's start!

What is a budget? Why is it important?

Budgets are planning tools that help us to:

• estimate the resources needed to develop our project and reach the intended goals
• decide how we are going to invest our resources in the different stages of our project (specific periods of time)
• monitor how we are utilizing these resources during the development of our project
• plan ahead to avoid risks

Budgets are an estimated plan for the resources in your project, they are an extension of your programmatic plan. As Tim Clark puts it:

"When you finish laying out a budget, you should feel like you’ve walked through the entire project"

By creating a budget you are organizing data to make it useful - you are organizing financial information that is relevant to your situation. Moreover, having a budget helps you understand the restrictions you have in terms of resources and manage uncertainty by tracking where your resources are going.

Basic steps to creating a budget

There are different steps you can take to create a budget for your project. Here are a few compiled approaches:

The 3 generic steps

• Estimate anticipated costs - breakdown all the spending items by category, express them in the monetary amount required
• Justify the budget outline - review your categories, adjust and confirm anticipated expenses
• Ensure cost-effectiveness - determine if the budget aligns to ensure the success of your project

The 6 steps

1. Look through lessons-learned documents - are there records of similar projects and their budgets?
2. Know your cost - do you know what is the cost of each resource needed for your project (human, material, etc)?
3. Roll up individual activity costs - what will be the total cost of all the resources you need for your project?
4. Add contingencies - what are the potential additional expenses we should be prepared for?
5. Monitor your progress and resources - are we spending money according to the budget we estimated?
6. Communicate changes to stakeholders - are we being transparent about our expenses with the team members and other stakeholders?

The 10 steps checklist

• Determine timeline - set target dates for development and approval of budget
• Agree on goals - align and prioritize objectives
• Understand current financial status - compare resources available and foresee expenses
• Agree on budget approach - define roles for budget managing
• Develop draft expense budget - determine costs
• Develop draft income budget - determine resources available or incoming
• Review draft budget - match income and expenses, make adjustments
• Approve budget - reach consensus
• Document budget decisions - compile budget decisions on a spreadsheet
• Implement budget - monitor expenses

A note on in-kind donations

What are in-kind donations?

When you are creating a budget consider including information about the in-kind donations invested in your project. What is an in-kind donation or contribution? The information we find on Wikipedia tells us that:

Gifts in kind, also referred to as in-kind donations, is a kind of charitable giving in which, instead of giving money to buy needed goods and services, the goods and services themselves are given. Gifts in kind are distinguished from gifts of cash or stock. Some types of gifts in kind are appropriate, but others are not. Examples of in-kind gifts include goods like food, clothing, medicines, furniture, office equipment, and building materials. Performance of services, such as building an orphanage, providing office space or offering administrative support, may also be counted as in-kind gifts.

In our case, we can also include as in-kind donation items:

• hours of volunteer work provided by editors and team members
• donated use of classroom or auditoriums, software design assistance, etc.

In-kind donations can be provided by different stakeholders of your project. It is important that you record the monetary value of these donations and include them in your budget to get a realistic assessment of the total cost of your project. What is the percentage that we are getting from our stakeholders/partners? What amount do we still need to fund?

How do you calculate the monetary value of in-kind donations?

This will depend on the type of in-kind donation you are receiving. For some items like the professional services provided by stakeholders or volunteers, you can identify the hourly rates of such services corresponding to your location. For others, such as appliances, furniture, etc. donated you can calculate the commercial cost of the items as sold in your location. You can find more guidance in this article by The Ford Family Foundation.

Additional considerations

• Break down your project into phases and estimate limits in your budget. You can update your budget as the project progresses from one phase to the other.
• Top-down or bottom-up estimations. If you already have a set amount of money that you can dedicate to the project, you will divide that total into the tasks or phases of the project (top-down estimate). If you don't have a set amount of money yet then you will create your budget by adding up all the estimated costs of the project (bottom-up estimation).
• Use a documentation method that works for you and your team. There are many tools that help you create and track a project budget (Eastimate, Brainleaf, to name a couple) or you can create your own system using a spreadsheet (on Excel, Google, LibreOffice).

Starting with the basics

As you saw in the previous module, our team of Wikimedians have developed their logic model and defined the activities they will be carrying out. They have also identified their stakeholders and how they will communicate with them. Now it's time to help them out with their budget planning!

Remember, through our logic model our team determined that to reach the impact we want ("Teachers improve their education practice by becoming active contributors and users of Wikidata") we are going to focus on the following outcome first: By December 2020, 15 participating teachers can comfortably conduct SPARQL queries on Wikidata. We are very excited to start!

We also agreed that in order to reach this outcome, our team will be conducting a series of 6 "WikiCafés" where these teachers can gather in an informal and comfortable setting to deepen their proficiency of Wikidata. We want to develop and print some guides, provide small notebooks, pens, stickers, and final certificates for the participants. We also want to give personalized thank you cards for the other stakeholders of our project.

Through our stakeholder analysis we identified the following main stakeholders: 15 teachers, the headmaster and academic supervisor of the school, 4 local Wikidata volunteers and 4 remote Wikidata volunteers who will be supporting the team, and of course our friend Billy Coffee, the owner of the café where the meetings will take place.

This is what our project budget looks like after our first brainstorming session:

Project: WikiCafé for teachers

Start date: November 5, 2019

End date: January 29, 2020

Available budget: Not determined yet

Stage/Tasks	Items	Estimated costs	Covered with in-kind donations	Needed to finance
Stage: Project Planning	Printed guides x16 Notebooks x16 Stickers x25 Education consultant Wikimedia consultations	$3.50 $6 $1.50 $20 (10 hours) $10 (10 hours)	- - - - $10 (volunteers)	$3.50 $6 $1.50 $20 -
Stage: WikiCafé 1	Unlimited coffee Finger sandwiches x16 Mini-brownies x16 Meeting location Wikimedia consultation	$5 $8 $5 $40 $2 (2 hours)	- - - $40, (owner of café) $2 (volunteers)	$5 $8 $5 - -
Partial Totals			$52.00	$49.00
Total Cost of Project				$ 101.00

What is something new or particular you can notice in this budget?

Managing a budget

We created a budget, now what?

Picture this: you and your team have created a budget with the estimated expenses that you will have during your project. You have reviewed it, agreed on the priorities, and have reached a final version of it. You're done!

But wait up! That's not the last time you will have to think about your budget.

As mentioned earlier, once your project is on the move you will need to keep track of how your budget is being spent: Are you utilizing your resources in the way you had planned? Do you need to make any adjustments? Are you encountering some unpredicted risks?

Important things to consider

Jennifer Bridges narrows down her budget managing advice to 6 effective ways for budget tracking:

1. Establish systems: Decide on what you will use to organize, document, and track your budget and expenses. This can be as simple as an Excel or a Google spreadsheet, a free or paid specialized software, or a customized tool like Wikimedia Ukraine built for their budgeting and tracking (found here).

2. Provide online access: Make sure that the document you are using to track your budget is accessible to all members of the team online, and that it is easy to understand for everyone.

3. Identify budget items: As you saw in the previous section: Identify all the expenses your project will have: Equipment? People? Office space? Marketing materials? Travel? Make sure they are effectively organized in your budget document.

4. Create budget: Remember: Make sure this is a collaborative work and that you review the initial draft with your team. Identify expenses and potential/available funding. Take into account potential risks or unforeseen circumstances and add a percentage to cover for that.

5. Assign someone to track: While the team is responsible for the budget creation and management, it is better if you assign one person to be responsible and accountable for updating your budget document and tracking the expenses.

6. Track and control in real time: Update the expenses as they happen, review the document often so you can identify potential risks on time and adjust accordingly. Pay attention to the details and communicate with the team and relevant stakeholders.

Budget tracking templates

So how do I design a budget tracking document?

That will vary depending on the project you are designing but in general take into account the following information:

• The time period of the project
• The stages of the project or tasks
• The type of expenses (categories, single items)
• The estimated costs
• The real costs (once you start tracking)

Look back at our friends' team WikiCafé project in the previous section. They are using a simple spreadsheet to track their budget for this specific project but your budget document could look different. It can be more or less detailed, include more or less stages, you can organize it according to expense categories, or it can take multiple pages in a spreadsheet. It depends on what works for your particular circumstances.

A budget document could also look like this:

Rahulkepapa / CC BY-SA

If you search the web you can find some Excel or Google sheet templates for budget tracking that are free and customizable like the ones found on Vertex42.

Another approach to budget making is the Outcome Based Budgeting. This approach is particularly helpful when you are aligning your resources to projects funded by a donor and you need to prioritize and focus on the outcomes of certain activities.

One more consideration

Additionally to your budget tracking document, decide how you will keep track of any receipt/bill/proof of purchase you will collect. Do you need to keep the physical copies or will it be enough to keep digital copies? Where will you store them? Who will be responsible for keeping those files up to date? This will vary depending on your project, the conditions of any grants you have received to fund the project, and the reporting documents you need to present. The earlier you decide on a system, the easier it will be!

Communicating your budget

Your budget tracking document can be part of your project report and can serve as a great tool to communicate successes and lessons learned as well. Moreover, it will support your project's transparency practices and serve as a base line for similar future projects.

As such you can present this information in a format that is more accessible to the different audiences you want to engage with (think back about who your stakeholders are for this project). For example, Wikimedia Deutschland included this design in their 2018 annual report to communicate a summary of their finances in the past 3 years:

Tjane Hartenstein (WMDE) / CC BY-SA

Do you think this is the same document that they used to track their finances after they created their budget? What do you think is different? What would be easier to understand for a general audience?

One more thing before you go: Budget risks

A budget is an estimate of your cost expenses and as such it can't always be 100% accurate. There is always some degree of uncertainty. The most common risk for a project budget is the potential for cost overruns, this means that the estimated costs of a product or service are lower than the actual amount you end up spending.

How can you budget for potential risks?

It is normal for a budget to include a percentage line for "incidentals" or "contingency", it will help you manage the uncertainty. How much that percentage will be depends on the circumstances of each project. Think about:

• Currency fluctuation - is there a chance that prices might go up during the development of my project?
• Human resources - what if one of the volunteers in my project get sick/can't continue with the project anymore?
• Sources of funding - if I'm using more than one grant to finance my project, what would happen if one of them isn't deployed on time?
• Resources - what if the resources I thought I needed are actually not enough?

No one can fully predict how things will change and how they will affect the development of a project, but we can make sure to be as prepared as possible to respond with ease. During your budget planning stages make sure you include a discussion about potential risks and contingencies plans with your team.

Course Portfolio Assignment: Create a simple budget for your project

Let's get down to business! 💵💴💰

What are the resources we need to make our project happen? How can we manage the resources we have available/once they are available? Let's build a project budget step by step:

Narek75 / CC BY-SA

Step 1: Define the time frame of the project you are working on. When will my project start and end?

Step 2: Identify the activities you will conduct in the planning, development, and evaluation stages of your project. What activities do I plan to conduct to reach my objectives?

Step 3: Brainstorm a list of expenses for each of these activities. What things and services will I need to purchase to conduct my project from start to end?

Step 4: Create your tracking document, compile and organize this information. How can I present my budget in a clear way?

Step 5: Incorporate your finished budget to your Course Portfolio and share it in the Discuss section!

Feel free to share some reflections about this process as well:

• What was something surprising you discovered through this process?
• What was the most challenging thing about this process?

References

Go back to Unit 2 - Module 3

Go to Unit 2 - Module 5