There are several different budget models, including formula budgeting, incremental budgeting, responsibility centered budgeting, zero-based budgeting, initiative-based budgeting, and performance-based budgeting (Goldstein, 2012). Whether one of these models or another is used in budgeting, awareness of the different types is necessary to determine the best fit for the given situation (Kampf-Dern & Pfnur, 2014). Formula budgeting is occasionally used in higher education practices, referring to the practice of “estimating resource requirements based on the relationships between program demand and program cost” (Goldstein, 2012, p. 93; Valeriy & Galina, 2015).
Incremental budgeting refers to the increase of a program budget by a given percentage (Goldstein, 2012). Responsibility centered budgeting looks at budget allocations based on program performance (Goldstein, 2012). Zero-based budgeting is the opposite of incremental budgeting, assuming no previous budget from any prior year and evaluating goals and objectives for each activity and looking at the cost of not keeping the activity (Goldstein, 2012). Initiative-based budgeting is a structured distribution of resources through the supporting of established priorities (Goldstein, 2012). Finally, performance-based budgeting focuses on budget allocation based on program outcome and the benefits of that outcome (Goldstein, 2012).

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Each of these has their own set of advantages and disadvantages, and it is for that reason that a hybrid model is proposed, combining performance-based budgeting with initiative-based budgeting, a process that would reduce the negatives of both types of budgeting while increasing the advantages. In a hybrid of these two budgeting models, the school would be able to look at each program on a case by case basis, determining how well the program did the previous year or previous semester and how well each program works to support established priorities of the school, requiring both aspects to be present, as one can be present without the other, in order to guarantee program funding. This would allow the school to further its strategic mission while at the same time managing funds more effectively.

    References
  • Goldstein, L. (2012). A guide to college and university budgeting: Foundations for institutional effectiveness (4th ed.). Washington, DC: National Association of College and University Business Officers.
  • Kämpf-Dern, A., & Pfnür, A. (2014). Best practice, best model, best fit. Journal of Corporate Real Estate, 16(2), 97-125. http://dx.doi.org/10.1108/jcre-09-2013-0027
  • Valeriy, C., & Galina, C. (2015). The time equations and formula budgeting in jointed model for higher education. American Journal of Educational Research, 3(8), 1015-1019. http://dx.doi.org/10.12691/education-3-8-11