Open&Change's budget logic explained

A simple budget table is part of the 100&Change online application form (Section F). This document explains the project design choices and assumptions underlying that table.

  • Open&Change has two layers: the initiatives layer and the swarm layer. The initiatives layer contains the actual care initiatives, and makes up the bulk of the budget (93%). The swarm layer contains activities directed to connecting initiatives into an ecosystem, enacted by Edgeryders.  

  • Open&Change lasts five years. Initiatives are launched in two four-year batches, one in year 1, the other in year 2. The first batch is the smaller one to allow ourselves a learning curve. Expenditure peaks in year 3.

  • Initiatives use the Open&Change funding as a springboard to long-term financial sustainability. We are a social entrepreneurship swarm; full success means using the grant cycle only this one time, and be self-reliant ever after. 
  • We appreciate initiatives are very different from each other. We ask every initiative joining the swarm to do its own sustainability planning. The budget is built postulating an average expenditure of 800,000 USD per initiative over four years.
  • Initiatives follow a standardised path towards sustainability. They spend their first funded year in prototyping; its second one in building capacity for rollout at a sustainable scale; its third and fourth one finding its legs in business as usual. Expenditure is expected to be modest in the first year, peak in the second year as investments are made, and then decrease, as it is used only to sustain the organisation as it reaches its long-term viable scale configuration. 

  • Each initiative goes through two checkpoints. At the end of its first year it has to have deployed a live prototype (in the field, not in the lab). At the end of its second year it needs to have started generating revenue. Successful completion of each checkpoint unlocks the next batch of funding. Unused funding is reallocated to launch more initiatives, or to finance contingencies.

  • The overall budget  is contained in section F of the 100&Change application. Its structure does not permit breakdown into layers or into years, so we had to aggregate our estimates. The exploded budget as below will be made available to the MacArthur Foundation.

Access this page from the shortlink http://bit.ly/openandchange-budget-logic .