Budget

Because money matters.

An important aspect of planning a hackathon is budgeting. A budget helps you to understand what your needs will be for the event, and it shows sponsors where their money will go. That said, there are a couple of key things to understand about budgeting that aren’t immediately obvious.

First, you need to have multiple budgets: best case, worst case, and realistic. The realistic budget is your best estimate of what everything will cost. The worst case budget is the absolute minimum you need to throw the Hackathon. The best case estimate is the budget you show to sponsors. This helps anchor them to the higher prices and convince them to give you more.

For successful budgeting, you should outline expenses expected at the event. There are required expenses, which should be met for the Hackathon to happen and additional expenses which will depend on your event planning. You should base your worst case scenario on the required expenses, while realistic and best case including additional costs such as t-shirts, rental of equipment for actitvites, stickers and etc.

The required expenses include the venue, meals, and prizes. To get an idea of what are realistic expenses, you can look at previous year hackathon budgeting, resources shared by MLH for budget planning or examples of other successful hackathons such as HackMIT.

Mini-workshop time!

We will look in details on how to plan for coverage of meals during the hackathon and make proper budgeting for this section as an example for creating a full budget.

Step1. Determine the agents! For this, you need to identify various agents, which will be at the hackathon (use #multipleagents!). Those agents will be hackers, sponsors, volunteers, mentors and organizers. The breakdown is individual and should be based on the needs of the hackathon.

Step 2. Estimate the numbers! As we are Minervans, we know the power of #estimation and how to use appropriate techniques to get a plausible estimate. If are reading this guide before covering #estimation, go to HC Index and check it out!

1. For our hackathon, we estimate that there would be at least 60 attendees in worst-case scenario based on the number of people who came to the mini-hack we organized in the first semester for Minervans only. For the upper bound, we based our estimation on the number of attendees last year Minerva Hackathon (~250) and multiplication of it by 1.5 factor which is suggested by the HackMIT guide. Thus, we have our lower bound at 60 and upper bound at 375 participants.

2. Then, we take geometric mean of our bound using this formula: $GM= \sqrt{upper\space bound *lower \space bound} =$ $\sqrt{60\times375}=150$ and here, you go! We got our hackers estimate. This seemed as very plausible number to work with as we were aiming for a small size hackathon which General Assembly would be able to accommodate. Pro tip: Always consider plausibility of numbers for your situation to get best estimations!

3. Lastly, other agents should be estimated based on the functionality of the hackathon. For example, the number of volunteers can be based estimated on the duties needed to run during the hackathon. For that, create Run of the Show and specify how many people you would need for each activity. But for initial estimations, you can base your numbers off organizers size. So, we had 5 organizers and for each organizer, we estimated that we would need from 1 to 5 helpers => take GM and we get ~ 2 helpers per organizer. Because the average size of the organizing team is around 50 at other hackathons, such as TreeHacks at Stanford, which host around 1000 hackers, a size of 15 seems very plausible for 150 hackers. Another tip: Always take underestimate for lower bound and overestimate for upper bound, which could potentially cancel each other out and lead to a closer actual number you need. [1]

4. Repeat same process for other agents and get your attendee break down as shown in Table 1. For this budget bulging example, we have 190 participants in total.

Table 1. Breakdown of the participants needed for hackathon creation.

Step 3. Involve the prices!

For this base your estimates on throughout research using #evidencebased since this is the amount you will ask from the sponsors.

We consider that 7$ includes drinks, snacks and food (Gulrajani, 2014). Since not every meal will cost the same (breakfast will be cheaper than lunch for example but more expensive than snacks), this estimate should optimize the final cost to cover all needed expenses for meals.

For this budgeting example, we will focus on the worst case scenario, so all numbers will reflect the estimated number of participants. For realistic or best case scenarios, the number of estimated participants should be multiplied by 1.5 to account for people who get seconds, accidents regarding food or the number of actual participants exceeding the estimated number (Gulrajani, 2014).

To calculate the final cost of meals in your budget, you use the formula of

${total \space cost \space of \space food\space for \space hackathon =}$ ${number \space of \space participants \times average \space cost \space per \space meal \times 3 \space meals \space per \space day \times days \space of \space hackathon}$

Thus, you get that for food of 190 participant hackathons, you would approximately need $7980. Again, this estimation is quite accurate as we used prices based on the average of what other hackathons spend and adjusted it to our hackathon size estimations.

Pro tip: For a better budget showcase to gain sponsors, you need to break down this big section, Food, into small subsections as shown in Table 2.

This approach will help to target specific sponsors for each section and make negotiations both more productive and successful. For example, you identified that you will need 1520$ for coffee. Your best approach here would be to target coffee shops such as Peets to sponsor coffee expenses. However, if you put the whole drinking section together, then sponsors can get reluctant to give you specified amounts of money since it is more likely for them to provide products they have, such as coffee and creamers, than direct money to cover additional expenses(Fontenot, 2014).

Table 2. Breakdown of Snacks & Meals section of hackathon budgeting.

The table outlines possible breakdown into sections based on the meal type (breakfast, lunch, dinner), snacks and drinks type (coffee, energy drinks, soda, and water). The prices for each category are based on the Minerva Hackathon budget 2019.

Hence your budgeting should be smart and targeted. Following this example, you can create a whole budget based on your parameters for the hackathon.

HC Footnotes:

[1] #estimation: In this section, we have applied multiple ways of estimation depending on the context (estimating number of participants based on GM, while basing prices on the research). We have shown the way how we calculated our numbers and gave justification for all assumptions used (assume that there would be maximum of 250 hackers based on last year example, etc.). Lastly, we provided detailed explanation of why estimated answers are plausible for our situation.