Income Budgets for Films

A standard part of a grant application, income budgets show how your film will be financed.

While most filmmakers* are likely familiar with basic expense budgets, their corollary, the income budget, is another story. Income budgets show how your film will be financed, and if you have already been raising money they show how far you have come and how far you need to go. Though a standard part of a grant application, they can be difficult create—especially for the first time. Learn more about what the reader of an income budget hopes to see and get tips for creating a successful income budget, below.

*Editor’s Note: While this post is geared towards independent filmmakers, it contains insights that apply to artists across disciplines. If you do not identify as a filmmaker, we encourage you to keep reading!

Income Budgets and Nonprofit Funders

To understand the purpose of the budget that you supply to a grantmaking funder, try thinking about your entire grant application as if it were a business plan for a for-profit start-up seeking investors. If you need $100,000 to launch your business, and you are seeking loans or investments of $10,000 each, you will have to explain to your potential financiers where the other ninety thousand dollars will come from. Sometimes for-profit investors will require that their money is placed in an escrow account that cannot be accessed until all the money for the budget is raised. Nonprofit funders have the same concern but they don’t ask for escrow accounts, which is all the more reason that they want to see a good income budget.

Don’t despair! Nonprofit funders exist to fund projects that the private business world won’t touch. The not-for-profit model was created because it was widely understood that for-profit businesses leave many things behind that are important to a strong society; such as work in education, health, science, and the arts. A nonprofit funder may not be concerned with making money, but they are very interested in making sure that what they fund will succeed. Uncompleted projects do not further their mission. To satisfy that concern, they expect you to demonstrate that you are responsible with money. The larger your budget, the more responsibility you will need to demonstrate. An important part of this is your income budget.

The income budget can be mysterious because they are so speculative. Especially when, at the beginning of a project, we don’t really know how it will be funded. Income budgets can be extra confusing for filmmakers from backgrounds where making expense budgets is common, but supplying the money is the problem of a producer, studio, or broadcaster. For filmmakers who work in staff positions or who come from or are educated in the world of major studios, television networks, major streamers or advertising, an income budget is a foreign idea.

From the point of view of a granting organization or a financier (or even a fiscal sponsor), your income budget is a window into how realistic it will be for you to complete your film. While an expense budget tells a story about executing your project, an income budget tells a story about you. Especially if little or no money has already been raised, a person reading an income budget is thinking about your understanding of fundraising, your skill at it, and if what you proposed is a realistic pathway for funding your project.

Films can be expensive, and creating an income budget for a $500,000 dollar film can be daunting. If your plan is plausible, it is evidence that you know what you are doing. Funders who are comfortable with your knowledge of what sources of funding are available are more likely to support you.

What the Reader of an Income Budget Hopes to See

Great art can come from all kinds of people. There is no prerequisite for talent. You may not be good at expressing yourself in writing, or be terrible with money and be difficult to understand when you speak, yet people may still be happy to purchase your work because of your talent. Unfortunately, that doesn’t mean that a funder is going to give you money to create it. Creating an income budget isn’t simply a question of making income add up to the same number as the expenses add up to, it’s whether an experienced reader will consider the income plan to be realistic. 

Practically all projects raising funding as a nonprofit will require a diverse mix of government and foundation grants, private donors, crowdfunding, and fundraising events. It’s a rare film that is fully funded (or comes close to being fully funded by one entity).

• Government grants include city, county, regional, state, and national arts councils. Generally, people start with local grants and work their way up as they gain experience. The right project with an experienced team could aim higher even if the project director is inexperienced.

• Foundation grants include a variety of nonprofit organizations from small to huge. Sometimes they might be philanthropic arms of private corporations. Your project, your experience, your team, and your partners will help determine which foundations are good fits for your project. 

• Fundraising Events are a traditional means of raising money and can be an important part of your income budget. They are great for meeting individual donors, and they can be used to launch crowdfunding campaigns.

• Crowdfunding for a film is often expected in an income budget because it has proven to be an effective way to raise money, even for emerging and less experienced filmmakers. It is unlikely that any film will be produced solely with foundation grants. It has also become an important tool because it is a step in the development of an audience, which is another critical issue for many grant makers.

• Private donors are individuals who will contribute to your project. If you are a nonprofit organization or are in a fiscal sponsorship program, individuals can receive tax benefits for their donations. Often, these are relationships that are nurtured over long periods of time. Over the years many people, especially those in lucrative professions, will increase the money they give as their incomes grow. They may also turn out to be important supporters of your career in the future. A good place to introduce your network to the idea of supporting your work is through fundraising events and crowdfunding. 

Your income budget might include any combination of fundraising methods and sources. Less experienced filmmakers who show variety in their income budgets and whose income expectations in each category appear to be credible, illustrate their knowledge of the filmmaking business. Some projects may be primarily financed in one way, others in another way, but the more comfortable you are with all of them, the more opportunities you will have and the more confident the reader of your grant application will be in your success. 

Even if you do not have previous experience in fundraising, a well-researched income budget that includes appropriate funders with compatible timelines, and income expectations that are in line with a funders grantmaking history and with your own level of experience, is a demonstration of your ability. 

Tips for Creating a Successful Income Budget

• Target funders that are appropriate for your discipline. Ideally, your income budget will list specific foundations, government grants, and even names of wealthy individuals (if they are likely to provide substantial gifts) by name. Be completely sure that the funders that you list actually provide grants to the discipline that you are working in. Some funders support different disciplines or change the phase of production they will support each year. Do your research. Many grant application readers are familiar with who funds what kinds of projects.

• Make sure your timeline and the funders timeline are compatible. Many granting organizations have one application deadline per year, release funds once a year, and require that their awards be spent during a period that may be far away from when you write your application. Funds from a foundation you list may not be available until after your project will be finished according to your own timeline. Some of these funding timelines are well known to grant readers.

• Project realistic grant amounts. The person reading your income budget should be experienced enough to know approximately how much money the leading foundations provide in their grants. Make sure the amount that you are applying for or expect to apply for from each source falls within the range of grants amounts provided by that source. If they provide grants in a wide range of amounts, what do they typically give to projects like yours from artists like you? Unknown funders or expectations of large grants may be researched by the reader.

• Choose funding sources that are appropriate for your level of experience. If you are new to filmmaking and fundraising, don’t suggest that you’ll be receiving significant income from high level funders that generally only work with experienced artists with good track records. This doesn’t mean that you shouldn’t be reaching out to these funders. Now is a good time for them to start getting to know you. But if you are going to list major funder as an income source you should anticipate income from them on the smaller side of what they normally give. If you are making a big budget feature length film on a subject that one of these funders is focused on, and you are not personally experienced, you should secure the participation of an experienced and well networked team whose names and work those funders will know. Large funders often choose projects that are synergistic with projects they already support.

• Pending or awarded? When you have decided on the mix of income sources that is right for your project, there is one more thing you should do in order to be clear to your reader. You should identify the stage you are in with each source. If you are listing foundations or government agencies, identify whether you have an application pending, confirmed, or if a grant has been received. If you are listing individual donations, crowdfunding or a fundraising event, note whether these have taken place. If you have already received donations from individuals or from an event or crowdfunding, put them on their own income lines, and if you are going to do more crowdfunding, events, or seek further individual donations, add more lines to the income budget.   

• When to List Anticipated Advances in Your Income Budget. Filmmakers who can illustrate a history of previous success may also be able to list anticipated advances from foreign sales, streamers, or other kinds of licensing, which generally will take place during the post production phase when buyers have a good idea of exactly what the film will look like. Those without a successful track record and existing business relationships will find this presales and advance payments difficult to achieve, and the reader of their income budget may be skeptical that this expectation is realistic. Some filmmakers list “box office” income in their budget, but because the film has to be completely finished before anyone will purchase a ticket, box office income is not an acceptable source of income. Presenting a rough cut at a fundraising event would be income from an event. In that case, it would be a fundraising event, not traditional film “box office.”

The goal of a grant application is to avoid obvious errors and to convince the reader that your film will be made. Some funders ask their application reviewers to use a point system for each part of an application, while others allow more nuanced analyses of the strengths and weaknesses of an application. Both of these methods acknowledge the strong points and the weak points of an application. Creating an impressive income budget is a key component of writing a strong grant application. It requires taking the time for some careful research. The result will be worth your effort.

-Matthew Seig, Media Specialst, Fiscal Sponsorship

NYFA Fiscal Sponsorship’s quarterly no-fee application deadlines are March 31, June 30, September 30, and December 31. We also accept Out-of-Cycle Review applications year-round. Reach out to us at [email protected] for more information. 

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