It is now widely appreciated that competition between kin inhibits the evolution of altruism. In standard population genetics models, it is difficult for indiscriminate altruism towards social partners to be favoured at all. The reason is that while limited dispersal increases the kinship of social partners it also intensifies local competition. One solution that has received very little attention is if individuals disperse as groups (budding dispersal), as this relaxes local competition without reducing kinship. Budding behaviour is widespread through all levels of biological organization, from early protocellular life to cooperatively breeding vertebrates. We model the effects of individual dispersal, budding dispersal, soft selection and hard selection to examine the conditions under which altruism is favoured. More generally, we examine how these various demographic details feed into relatedness and scale of competition parameters that can be included into Hamilton's rule.