In allocating resources in distance teaching institutions and programs it is essential to:

• Devise a budgeting process based on a clear strategic plan
• Balance the competing claims of components and activities
• Carry out the first two steps in ways that ensure that the essential objectives of the strategic plan can be achieved.

The institutional or program budget that comes out of this process must be designed so that, like the strategic plan, it provides for change and accommodates unforeseen situations.

There are two important differences between the budgets of distance education institutions and those of conventional institutions:

• The balance of allocation between, for example, teaching and other activities-such as development, materials production, and student support-is strikingly different.
• Distance teaching institutions normally have less need for capital funding in the form of buildings and equipment, and a much greater need for funds to develop and deliver course materials.

The major funder of a distance teaching institution, normally the responsible government, must recognize that the institution's needs are often quite different from those of conventional institutions. Failure to recognize this difference has often been a source of difficulty for distance teaching institutions.