Specific roles faculty members can play in their institution's budget processes are discussed, and the general ends served by budgets are identified. Each of the dimensions of institutional character (e.g., size, mission) determines the ways in which participants in budgeting will interact. For example, broader faculty participation in budgeting generally is more easily achieved in smaller colleges than in larger institutions. Other factors influencing faculty participation in budgeting include the overlap of budget cycles and the number of layers of review in the process. Three broad categories that encompass most of the questions asked by participants in budgeting are: expenditure plans, source of revenue, and hidden costs. Strategies for gaining flexibility in the budget are also considered, including creating a central reserve of resources by withholding a small percentage of the funds distributed to lower levels in the institution. In addition, strategies that can be employed to meet a fiscal crisis are reviewed: short-term (1 to 3 years), focusing largely on cash-flow management; intermediate-term (2 to 6 years), focusing on personnel policies; and long-term (3 to 9 years), focusing on the rearrangement of program priorities, including significant reallocation of resources that may require the reduction or elimination of programs. (SW)