How does a program budget differ from a line-item budget?

A program budget categorizes expenses based on specific programs or projects, which allows for a more strategic allocation of resources. This type of budgeting focuses on outcomes and the funding needed to achieve specific goals associated with various programs. It emphasizes the relationship between funding and program performance, helping organizations to assess the effectiveness of their investments.

In contrast to a line-item budget, which organizes expenses by categories (such as salaries, supplies, etc.) without linking them to specific programs, a program budget provides a clearer picture of how funds are utilized to achieve programmatic objectives. This makes it easier for decision-makers to allocate resources effectively based on program needs and expected results, rather than on individual expense categories.

This structured approach to budgeting can enhance accountability and transparency within organizations, as it aligns financial resources directly with strategic goals.