Our experience shows that Option 1 is the recommended and superior approach for the following reasons:
The participants are quite likely to know that the full budget is $30M and join your forum with this number as part of their mental model in joining the forum. Even if they don't say it, providing less than the full amount will cause unnecessary confusion.
Showing participants the full budget along with the "must fund" initiatives creates a more realistic mental model. In our personal lives we know that don’t have discretionary control over our entire salary. Instead, we mentally allocate for “fixed costs” – rent, food, insurance, car payments, and so forth. This is also true of our businesses, and showing these fixed or pre-allocated costs build trust that the process represents true reality.
Listing the required funding items at the top of the forum creates a powerful learning experience for participants who are new to collaborative prioritization. Specifically, when the forum starts, tell your participants that the first thing they must do is equally fund the required initiatives. This teaches them how to use of Decision Engine, introduces them to collaborative prioritization and prepares them for the more challenging negotiations that will emerge as the primary focus of the forum.
We'll close by noting that this design tip is congruent with the values and practices of Scrum and the larger Agile community. Specifically, agilists value transparency and collaboration as a means to making effective decisions. Structuring Design Engine forums as recommended in this design tip will increase transparency and trust within your teams.