The thought of figuring out how to create a Parent Teacher Organization (PTO) budget can be super intimidating if it’s the first time you’re putting one together.
It’s such a big responsibility, after all and money talk can be uncomfortable in and of itself.
Fear not, today’s post is going to walk you through the entire process of putting a PTO budget together.
With the tips included in this post, you’ll have all you need to map out a budget that’ll work for your school parent group in no time.
Why Create a PTO Budget?
Before we talk about how to create a budget for your PTO, let’s first address the why.
Creating a budget is a great way to know your group is on track to come out at least in the black for the year, so it is recommended that all groups use a budget.
Otherwise, how else will you know if you have enough money left in the bank to last for the year?
PTOs cannot run up debt, so staying at a level with money literally in the bank is an absolute must!
Truth is, setting a budget really is an art more than a science.
It’s going to vary each year based on a bunch of different factors, some unknown to you at the time of making the budget.
The key is to treat the budget like living, breathing document that you’ll use as a guide throughout the year, but also be ready to tweak if the need should arise.
The other major reason to use a budget is because it creates a great deal of financial transparency.
PTO members can actually see where money is going.
This can make fundraising easier since all will be able to see the numbers for themselves.
What a PTO Budget Isn’t
Let me start off with a super important misconception about PTO budgets.
Your PTO Budget is not a static document that can never change.
It very well may change throughout the year, depending on how your PTO’s fundraising efforts go.
The amounts allocated for different budget line items may increase when there’s a banner fundraising year or shrink if the fundraiser is a bust.
Similarly, the PTO budget isn’t a pipe dream.
In fact, it’s just the opposite.
As much as possible, you need to base your budget on what the actual numbers will be.
The PTO leaders should be taking a look at the budget a few times throughout the year to see where things stand, making adjustments as needed.
For example, this year we rocked out fundraising for one PTO so we were able to bump up budgeted amount for staff appreciation and for the end of the year celebrations the school has planned.
But last year, our PTO’s fundraising at another school absolutely tanked, so we had to make cuts across the board to not end up with a negative bank balance.
Just like with your personal finances, the PTO budget needs to be revisited and re-evaluated after the budget is first approved because things will inevitably change.
What a PTO Budget Is
A PTO budget is no special unicorn.
Just like your household budget, which ebbs and flows with the reality of bonuses from work or unexpected car repair bills, the PTO budget is a working estimate of the monetary ins and outs for your group.
Without a budget, you could very easily find that come the end of the school year, your plans have to abruptly change because there’s simply no money in the bank account to fund events that were previously scheduled.
That would be a huge bummer and feel like a failure to everyone involved, so don’t make that mistake!
So sticking to the budget is necessary.
Another benefit to having a PTO budget is that it gets all leaders and volunteers on the same page.
Everyone knows what expected.
When Becky goes to get dance decorations and food for the Daddy Daughter Dance, she’ll know that there’s only $500 allocated for the dance, so she can’t spend more than that.
Similarly, Steph knows as Fundraising Chair that her goal is to earn $4,500 from the Concessions Stand this year, so she needs to meet or beat that number.
It’s all made clear by the budget.
A PTO Budget Reflects Your Group’s Priorities
Your PTO budget is a mirror reflection of your PTO’s goals and priorities.
For example, if your PTO plans to add an addition to the school playground, then you’ll probably want to decrease spending for programs and events while increasing savings until that goal is met.
How much you attribute for one category or another depends on where your focus should be as a group.
And that may change from year to year.
A few parents may feel really passionate about starting a school garden, for example.
To get the garden started will require more money than to maintain it, so your budget will need to account for that.
And similarly, once the garden is up and running, it won’t take as much money to sustain it, so your PTO budget can reflect that change too.
Who Should Make the Budget?
Ideally, the President and Treasurer should sit down together and map out the budget.
Involving the Fundraising Chair is a smart tactic since they’ll have insight into how their plans will flesh out.
If the Principal wishes to be involved, invite her into the process as well since she’ll have insight into upcoming needs and possible programs to be funded.
Before the budget meeting, talk with the outgoing President and Treasurer to get an idea of any budget changes that should be made.
They’ll have a good idea of where things were tight or loose, money-wise.
And they’ll be able to give you information ahead of time so that you can make the adjustments at the onset of the budgeting process, and hopefully avoid having to make major changes during the school year.
Creating a Proposed Budget
The most important thing to know about making a budget is that your income and expenses should net out with money left to roll over into the new school year.
So let’s start there!
Estimate Income
There’s two ways to create a budget- starting either with the expenses or the income.
For simplicity’s sake, let’s start with taking a look at how to estimate your income when putting together an annual PTO budget.
Make a list everything your PTO will do to bring in money for the year.
Make sure to include every income source you have, including school grants, community grants, passive income fundraisers and major fundraisers as well.
Consider whether there were any special circumstances with the income source:
Was it is one time grant?
Don’t include it in the upcoming year’s forecasted income.
Was this the fourth time offering the same fundraiser and the amount raised each year has decreased?
Adjust your expected income amount and enter accordingly in the Budget Tracking sheet.
Using the income earned from the past few years, fill in an amount for each income source listed.
When in doubt, estimate low.
With that all filled in, you now have a ballpark figure for income goal for your PTO.
Now comes the fun part- figuring out how you’ll spend it!
Make a List of Expenses
Similar to how you estimated income, take a look at the last few years of information for actual costs.
Quite often you’ll be able to get a really good idea of what things will cost in the near future, just looking at this information as a reference point.
If you’re starting up a new program, and don’t have an idea about the true cost, have the officer or committee chair do some research and report back.
Costs can’t be estimated in a vacuum since they’re tied to reality.
Make some calls to vendors like DJs or the local ice cream truck, or hop online and check prices for things you think you’d use for different family event programs.
Get actual prices and ballpark costs.
Don’t forget to include fundraiser expenses since it takes money to make money.
Yes, they will be offset by the income, but it’s necessary to track to get a true financial picture.
Do Some Math
Once the Income and Expenses have been filled in, take a look at your overall numbers.
Are you spending what you want to spend in different areas?
For example, if your goal for the year is to get more parent involvement, is $250 for family programming really enough?
Also, do you income and expenses at least net out to a surplus, even a small one?
Ideally, you’ll want to leave some money as start up cash for the next school year too.
If you run the account down to zero, it’ll be putting next year’s officer’s into a super uncomfortable spot since they won’t be able to do anything until a fundraiser is held and the proceeds come in.
And that’s not a fun way to begin the school year!
Plus remember that going into the negative for your PTO bank account isn’t a possibility.
Leave some breathing room!
Many groups list out a certain number to be rolled over each year to ensure the new school year isn’t held hostage by the decisions of the previous year in their Bylaws and Standing Rules.
Vote on the Budget
Now that you have a proposed budget, you’ll want to present it for a vote at your next PTO meeting, after you’ve first circulated it to officers and committee chairs and incorporated their feedback.
It’s easy to overlook a new program or include an unnecessary expense, so extra eyes can be helpful in spotting those oversights.
Once it’s approved, everyone will know the expectations and spending limits for their position and committee!
Pro Budget Tip
Add into your Bylaws and Standing Rules where appropriate that spending overages 10% or less are automatically approved.
This’ll save the headache of having to vote to make budget adjustments throughout the year for a common overage due to rising prices of goods and services.
Just make sure your budgeted income amount exceeds your budgeted expenses by more than 10% for this trick to work!
A Special Note for PTOs Just Starting Up
If you’re just starting a PTO and you think you have absolutely no information to work with, fear not.
You’re not actually starting with nothing.
Here’s what to do:
Ask your Principal for fundraisers that the school has done before.
Familiarize yourself with the type of fundraiser and the amount of money typically earned, along with associated expenses.
That way you’ll have a ballpark idea of what’s possible when first starting out.
If this information is not available, then you’re going to have to guess estimate or ask other PTOs for their experience.
And with that in mind, you should be aim to be conservative with your estimates of income and generous with your estimates of expenses.
In all of my experience, I’ve found that it’s a lot easier to earn more than you think is possible from a fundraiser than it is to come under budget for an event!
Groups that are brand stinking new should consider having a fundraiser early in the school year and then put together a budget for the rest of the year after the net income after fundraiser expenses comes are received.
This will eliminate pure guessing and will mean that the budget is based on reality.
Plus it avoids the double work of having to make adjustments in every category based on the fundraising results.
Until the fundraising proceeds come in, your PTO will have to be creative with putting on low cost events!
Resources to Help Create PTO Budgets
The budget creation process is a snap when you use the Treasurer’s Finance Manager:
As a PTO/PTA or Booster Club Treasurer, you’ve got enough on your plate and don’t need another full time job.
Stop spending precious volunteer hours battling confusing spreadsheets and struggling to make sense of your group’s finances.
The Treasurer’s Finance Manager is your all-in-one solution, designed with your unique needs in mind.
Imagine: auto-magically generated reports, budgets that update themselves, and complete financial transparency without having to do any math.
Finally, a user-friendly tool that saves you time, reduces stress, and delivers exactly what you need to easily manage your group’s money.
No fluff or confusing features, it’s all been distilled down to a streamlined, low learning curve experience that anyone can do.
Purchase once, use forever!
Watch this!
For a video walk through of setting up a budget, give this video a watch:
Over to you!
Every PTO should be using an annual budget to help run their group.
The budget is a reflection of the school parent group’s realities and priorities, so more is involved than slapping some numbers together to make everything balance out.
But that doesn’t mean that creating a PTO budget is an overwhelming process that’s hard to do.
Just the opposite is true when the steps laid out in this post are followed!
