Why is stakeholder engagement crucial in budget planning?

Stakeholder engagement is essential in budget planning as it ensures that the needs and priorities of stakeholders are represented. This involvement is crucial because stakeholders, such as community members, employees, board members, and other relevant parties, possess valuable insights and perspectives that can shape budget priorities and resource allocation. By actively engaging stakeholders, budget planners can better understand the diverse needs and expectations of those who will be impacted by financial decisions. This leads to a more comprehensive and effective budget that aligns with the strategic goals of the organization while addressing community and stakeholder priorities.

Incorporating stakeholder feedback can also foster transparency and accountability in the budgeting process, making it easier to gain support and legitimacy for the budget decisions made.