In most land trusts, the budget is reviewed and approved by the full board. In certain limited circumstances, for some large organizations, the board sets budget policies and the staff or committees are able to create budgets that fall within these carefully circumscribed policies. Budgets should track the annual program plans for the organization and should include an annual cash flow projection that will show expected cash flow deficiencies. This allows an organization to use the budgeting process to clarify what it can and cannot accomplish in any given calendar or fiscal year. Annual budgets should also be in line with a multiyear framework budget or philanthropy and fundraising plan, if available.

Because land trusts must be sustainable for as long as the protection agreements they secure, organizations should place a priority on long-term financial stability and create an operating reserve to sustain the organization in difficult fiscal years. (Land trusts with reserves found them to be essential for sustaining their level of operations during the financial instability of the early years of this decade.) The land trust should have a practice of regularly contributing to reserves, but can and should choose to use those reserves when needed. Operating at a deficit or tapping into the reserves should be a careful decision made by the board during the budgeting process.