How to Build a Budget for a Parent Cooperative School from Scratch

A well-built co-op school budget is the most important financial document you'll produce all year. Not the monthly treasurer report — the budget. The budget is what the board approves at the start of the year. It's the roadmap for every financial decision that follows. And building a good one is more complicated for a cooperative school than for most volunteer organizations.

Step 1: Gather prior year data

The best predictor of next year's expenses is last year's actuals. Pull the year-end financial summary from the prior year — or, if you're starting fresh without one, download 12 months of bank statements and categorize the transactions yourself. This is your starting point.

If this is the school's first formal budget, use last year's bank activity as the baseline. Imperfect history is better than no history.

Step 2: Project income

Co-op school income sources to budget:

• Tuition income: current enrollment × monthly tuition rate × months in year. Account for sliding-scale families separately.
• Re-enrollment income: deposits collected during spring enrollment
• Grants: only include grants you have reasonable confidence of receiving. Note any pending applications as "contingent income."
• Fundraising income: base estimates on prior year results, adjusted conservatively
• Family fees: field trips, workshops, materials charges

Total your income projections. This is the ceiling for your expense budget — you cannot sustainably spend more than you expect to bring in.

Step 3: Project expenses

Co-op school expense categories:

• Personnel: teacher salary or compensation, payroll taxes if applicable
• Facilities: rent, utilities, maintenance, cleaning
• Educational materials: curriculum, classroom supplies, art materials
• Insurance: general liability, directors and officers coverage
• Licensing and legal: state licensing fees, any legal or accounting fees
• Administrative: banking fees, software, printing
• Events: any school-wide events, community celebrations
• Contingency: 5-10% of total expected expenses as a buffer

Step 4: Build the draft and review with leadership

Before presenting to the full board, share the draft budget with the school director and one or two senior board members. Get their input on anything that looks off. The teacher compensation line especially should be confirmed with the director — that's often 50-70% of a co-op's total expenses.

Step 5: Present and get board approval

The budget needs a formal board vote to be authorized. When you present it, explain the major assumptions: what enrollment number you based tuition income on, what inflation factor you used for expenses, and what your plan is if income comes in below projections.

Once approved, use the budget as a monthly comparison in your treasurer reports. For how that looks in practice, the income tracking guide and the report template cover the budget vs. actual section in detail.

Common questions

What if income and expenses don't balance?

Present both scenarios to the board. If expenses exceed projected income, the board needs to decide: cut expenses, increase tuition, run a larger fundraiser, or draw from reserves. That decision belongs to the board, not just the treasurer — your job is to present the math honestly.

How often should the budget be revised?

A mid-year budget revision is appropriate if circumstances have changed significantly — significant enrollment changes, a grant falling through, or an unexpected major expense. Minor variances are better tracked in monthly reports without a formal revision.

EasyTreasurer's monthly reports include budget vs. actual tracking, so you're always monitoring your actual performance against the plan you set at the start of the year.