What does Target Base Budgeting involve with respect to projected revenue?

Target Base Budgeting emphasizes the strategic allocation of anticipated revenue by prioritizing certain projects or needs that align with the organization's goals and objectives. In this context, holding back a portion of the projected revenue allows decision-makers to ensure that funds are reserved for specific priority projects that may have been identified as essential for the organization’s growth or improvement. This approach contrasts with simply allocating all projected revenue equally across departments or using all revenue for immediate fiscal needs, which may overlook long-term planning and strategic initiatives.

By holding back a portion for priority projects, agencies can better manage their resources and direct funding towards initiatives that will yield the greatest impact or return on investment, thereby supporting a more sustainable financial strategy. This practice helps to not only address current operational needs but also prepares the organization for future challenges and opportunities.