When it comes to running Agile portfolios, budgeting can feel like walking a tightrope—there’s always a balance to find between long-term strategy and the agility to adapt. That’s where Participatory Budgeting comes in. It’s not your typical “top-down” budgeting process where leadership gathers in a room, crunches numbers, divvies up the funds, and then hands teams a preset allocation. Participatory Budgeting is like a breath of fresh air, flipping that dynamic to encourage more dialogue and collaboration between Agile teams and decision-makers.

Think of it this way: instead of relying on a small group of people to decide where the money should go, Agile teams and stakeholders come together to collectively decide on funding allocations for various epics. It’s not about everyone getting their hands on the budget just for the sake of it; it’s about shared responsibility and a deeper connection to the big picture. Everyone becomes more invested (pun intended!) in what gets prioritized because they had a direct say in it.

The magic often comes into play when these conversations reveal different perspectives. Teams on the ground might bring in awareness about overlooked technical debt or tools they desperately need, while leadership shines a light on market trends or regulatory changes that are storming down the pipeline. It’s through this back-and-forth that teams and stakeholders align on where their most limited resource—funding—can have the most significant impact.

Participatory Budgeting also has a knack for surfacing valuable insights. Sometimes, a department is pushing hard for an epic to be funded, but through group discussions, it becomes clear that it might not provide as much value as initially thought or that the timing isn’t quite right. Rather than feeling like their epic has been shot down from some distant ivory tower, teams see firsthand why other initiatives are prioritized. That newfound transparency fosters accountability and understanding in a way that a simple “No” from upper management never could.

But make no mistake, this process isn’t a magic wand that eliminates all disagreements or tough calls. The truth is, Agile teams can still find themselves in heated discussions about which epics get funded. But the difference lies in the approach—every voice has a seat at the table. It’s a lot harder to walk away feeling like you’ve been sidelined when you’ve actively participated in the decision-making process. The key here? Responsibility is shared across the organization, removing the “us versus them” mentality that often arises between leadership and teams.

Another advantage of Participatory Budgeting is how it lends itself to Agile’s core principle of adaptability. Let’s face it: priorities change. What seemed like a top epic at the start of the year might drastically shift by the mid-year point thanks to new customer demands or economic shifts. By establishing a practice of reviewing and reassessing funding allocations regularly, Agile organizations stay flexible, able to pivot calculatedly instead of scrambling. This ties directly into innovation—knowing that priorities aren’t locked in stone, teams feel empowered to propose bold new ideas, secure in knowing there’s a process for those concepts to be considered alongside more operational necessities.

That said, participatory processes demand maturity from the teams involved, both in terms of emotional intelligence and financial literacy. It’s not enough to throw ideas into the pot and hope for the best. Knowing the cost of trade-offs is part of the journey, and educating teams on how budgets align with larger strategic goals is essential for success. This balance can be tricky at first, as teams learn to think beyond their immediate needs and embrace a portfolio-wide perspective.

I often see this concept flourish in Agile organizations that embrace a sense of community. When the values of openness, collaboration, and trust are lived out daily, teams are naturally primed for participatory processes. Without that culture in place, the idea of budgeting collaboratively can feel somewhat forced or even chaotic.
One of the most interesting shifts I’ve seen in Agile portfolios is the move to Participatory Budgeting. Instead of a small group of executives deciding where all the money should go, Participatory Budgeting invites a broader group of stakeholders—Agile teams, business owners, product managers—into the conversation. It’s about distributing both responsibility and influence when it comes to where the dollars flow. And while it sounds collaborative and great, as with anything involving Agile principles, it comes with its own set of wrinkles to iron out.

One challenge many organizations face when trying to allocate funding in the traditional way is the feeling of disconnect. Teams don’t always understand why certain epics or initiatives get the funding they do, especially when on-the-ground realities suggest a different priority. When the folks building day-to-day understand the broader vision, and when they’re actually involved in shaping where the budget goes, they feel more connected to the company’s goals. Participatory Budgeting helps bridge that gap because teams are in on the discussion. They get to have a say, and as a result, they share a much deeper sense of ownership in the portfolio’s success.

But it’s not just about making everyone feel included—it’s also about smarter decision-making. Agile teams are often closest to the work, so they have valuable insights into which initiatives are likely to deliver the most value. When top-down budget decisions don’t account for those perspectives, companies can end up funneling funds into initiatives that look good on paper but don’t translate into actual value.

Now, what does this look like in practice? Picture this scenario: You’ve got quarterly or bi-annual budget cycles, and instead of locking down funding way in advance, you bring everyone into the room once the priorities are clear. Teams break down epics with estimates of effort, potential risk, and expected value. The outcome of these sessions isn’t just a line-item budget—it’s a shared understanding of why certain initiatives are getting more weight than others. Everyone leaves with a clearer vision and, more importantly, a commitment to making it all work.

One of the nice things about Participatory Budgeting is that it encourages a dynamic allocation of funds. Traditionally, once money is assigned to an epic or program, it’s pretty much set in stone. But in an Agile portfolio, you need flexibility. Things change fast, and teams might uncover new opportunities or risks. Participatory Budgeting creates that mindset shift, where people understand that budgets are meant to be revisited and reallocated as the situation evolves. It’s less about locking everything down upfront and more about maintaining agility in the financial strategy itself.

Of course, we can’t ignore that there will be moments of friction. Not every conversation about money is going to feel smooth or easy. Different teams might advocate for their own epics, each genuinely believing their work is the top priority. That’s natural, and in some ways, it’s the price of innovation through collaboration. But here’s where strong facilitation comes in: Someone has to guide these conversations and keep them focused on the big picture, ensuring resources align with strategic goals. When managed effectively, those tough conversations can lead to better decisions and an enhanced understanding of why certain choices need to be made.

At the end of the day, Participatory Budgeting fosters accountability throughout the portfolio. When teams are looped in on discussions around funding, they’re more likely to follow through with commitments. Instead of treating funding as a distant decision made by the powers-that-be, there’s now a collective sense that “we decided on this together, so we owe it to ourselves to make it work.” It creates a culture of shared responsibility, where success or failure is owned by everyone.

What this also does, and often goes unnoticed, is stimulate innovation. When teams know they have a hand in decision-making, they’re more likely to advocate for bold ideas. You might hear proposals for experimental initiatives aimed at breaking into new markets—or even suggestions for reallocating funds towards under-the-radar projects that could change the game. Participatory Budgeting allows Agile teams to push boundaries because they trust that their perspectives are valued and are willing to assume responsibility for both success and missteps.

In the grand scheme of things, budgeting is not the most glamorous aspect of portfolio management. But by taking an Agile approach to it—by inviting more voices, focusing on adaptability, and fostering accountability—companies can ensure their financial decisions serve the evolving needs of the portfolio and the people driving it. It’s just another way Agile principles can transform the way organizations work, bringing a sense of transparency and shared ownership where it’s often missing.

So, while Participatory Budgeting might look like a simple approach to decision-making, it’s actually a powerful tool to connect strategy, execution, and funding in a way that keeps everyone rowing in the same direction. Isn’t that what Agile is all about?