To some grantwriters, the budget seems cut and dried. It tells how much money you need to carry out the project described in your narrative. It’s often left for the fiscal or program folks to develop. This “hands off” approach misses the opportunity to use the budget to support your narrative and strengthen your proposal.
Budgeting is another way of telling your story through the process of translating your project into fiscal terms. It’s important that it describe the same project, and the reader should be able to guess what the project is, just from reading the budget. This works in two ways:
- A single theme should run through your whole proposal. The written narrative, goals and objectives, timeline, evaluation and budget should describe the same project and include the same items.
- Your budget categories should tie to the narrative. Since in many nonprofits personnel can be 80% of your costs, “personnel” shouldn’t be just one budget line — “line item” out each position. Be sure that you use the same job titles in the narrative and the budget — not “counselor” in one section and “case manager” in another. If you attach job descriptions, they need to use the same titles too.
SHOWING TOTAL FUNDING
Use the budget to put your best foot forward. If you’re only requesting partial funding for a project, show the project whole budget — especially if you’re spending your own funds. If you have or are seeking other funding, tell where it’s coming from. Showing other funds for the project always strengthens your position, even when no match is required.
The budget below was for a small performing arts organization to expand its marketing efforts and build audience. The group was already spending 10 % of its budget on marketing, so the “other funds” didn’t require any extra expense. But it showed that the foundation was only being asked for 60% of the project cost, even though the other sources of funding aren’t identified.
Also look at the budget categories. This is pretty obviously a marketing grant. You could get an idea of their project strategy without even looking at the narrative. If you knew this was a performing arts organization, you could guess it was for audience development.
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Year One |
Year Two |
Year Three |
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|
|
Other |
Grant |
Other |
Grant |
Other |
Grant |
|
|
Funding |
Funds |
Funding |
Funds |
Funding |
Funds |
|
|
|
|
|
|
|
|
|
Mailings |
6,500 |
3,000 |
6,500 |
9,500 |
6,500 |
9,500 |
|
Print Ads |
0 |
5,000 |
0 |
5,000 |
0 |
5,000 |
|
Bus Ads |
0 |
1,760 |
0 |
2,000 |
0 |
2,000 |
|
PR Materials |
0 |
1,500 |
0 |
1,000 |
0 |
1,000 |
|
Programs |
0 |
2,700 |
0 |
3,000 |
0 |
3,000 |
|
Marketing Plan |
0 |
1,000 |
0 |
0 |
0 |
0 |
|
Graphic Design |
0 |
1,000 |
0 |
1,000 |
0 |
1,000 |
|
Development |
2,000 |
2,000 |
3,000 |
3,000 |
3,000 |
3,000 |
|
Exec Director |
6,666 |
3,333 |
13,332 |
6,666 |
13,332 |
6,666 |
|
Rent |
600 |
600 |
600 |
600 |
600 |
600 |
|
Telephone |
600 |
600 |
600 |
600 |
600 |
600 |
|
Postage |
120 |
120 |
120 |
120 |
120 |
120 |
|
Supplies |
300 |
300 |
150 |
150 |
150 |
150 |
|
Copying |
60 |
60 |
60 |
60 |
60 |
60 |
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|
|
|
|
|
|
|
|
Totals |
$16,846 |
$22,973 |
$24,362 |
$32,696 |
$24,362 |
$32,696 |
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|
|
|
|
|
|
|
|
|
|
|
THREE YEAR |
TOTAL |
$153,935 |
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|
|
|
|
THREE YEAR |
Other |
$65,570 |
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|
|
|
THREE YEAR |
This Grant |
$88,365 |
SUSTAINABILITY
Increasingly, funders are asking about project sustainability. They want to know how your project will continue to be funded after their grant period and how the grant project will help strengthen your organization. Since this is often a question in the funder’s guidelines, it’s generally addressed in the narrative (with some hemming and hawing). If you know how you’re planning to continue funding, you can strengthen your case by showing future funding in the budget.
The example below was for a multi-program Community Action Agency. In a common scenario in recent decades, as their government funding was cut they were looking to preserve programs by aggressively seeking private funds. The proposal was for a 3-year grant to develop fundraising capacity — strengthen their development program and increase their private funding across the board. We wanted to show how the development program would not only pay for itself, but strengthen the agency’s social service programs during and after the grant period.
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Period of Grant |
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|
Income from Fundraising |
1998 |
1999 |
2000 |
2001 |
2002 |
2003 |
2004 |
|
Direct Mail |
35,444 |
39,696 |
50,000 |
70,000 |
100,000 |
110,000 |
120,000 |
|
Events |
57,414 |
43,211 |
50,000 |
57,000 |
75,000 |
100,000 |
110,000 |
|
Major Donors |
26,600 |
20,000 |
40,000 |
77,000 |
120,000 |
170,000 |
175,000 |
|
United Way |
70,000 |
232,938 |
182,000 |
182,000 |
182,000 |
190,000 |
200,000 |
|
Corporations |
11,500 |
95,751 |
145,000 |
185,000 |
195,000 |
200,000 |
210,000 |
|
This Grant |
|
|
120,000 |
80,000 |
50,000 |
|
|
|
Other Foundations |
18,428 |
25,760 |
20,000 |
90,000 |
140,000 |
160,000 |
170,000 |
|
Community |
33,036 |
51,031 |
60,000 |
92,000 |
138,000 |
120,000 |
125,000 |
|
TOTAL |
252,422 |
508,387 |
667,000 |
833,000 |
1,000,000 |
1,050,000 |
1,110,000 |
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|
|
|
|
|
|
|
|
|
Development |
170,000 |
170,000 |
310,000 |
320,000 |
330,000 |
340,000 |
350,000 |
|
Funds Contributed to Agency Programs |
82,422 |
338,387 |
357,000 |
513,000 |
670,000 |
710,000 |
760,000 |
The budget layout for this 3-year grant covers 8 years. The two years before, three years of declining grant funding, and two years afterwards. Aside from a big jump in corporate giving (which they had already been working hard), there isn’t a huge income increase in the first grant year (2000). But by the end of the grant period, every category has been incrementally strengthened, building a diversified funding base that continues to support the agency’s services. (By the way, in 2003 they raised $1.1 million in private funds).
COMBINING BUDGET WITH PROJECT PHASES
You can also develop a functional budget, which allocates funds to project phases for funders who reimburse for milestones, or if you want to show your cash flow needs. You’d probably also want to provide a conventional line item budget. This example also allows you to tie your budget to goals and objectives and to the timeline.
DEVELOPING THE BUDGET TO SUPPORT YOUR STORY
In good practice you design your grant project, establish staffing, then develop the budget. But don’t stop there. Take the budget to the program manager who will implement it and see if they have any additions or see any holes. Then use the budget categories to judge your narrative. See if everything in the budget is included in your program description and goals and objectives. You may have to go back and add wording to make them consistent. Of course, turn this around and be sure everything in your narrative is budgeted for, even if it’s to be paid from other sources.
When writing your budget narrative or justification, don’t just include basic information. Briefly tell what the major project staff will do and show how you arrived at significant numbers (Staff will be paid at agency rates, equipment bids from suppliers, rent prorated according to FTE project personnel, 400 chairs @ $5 each, etc.).
Finally, make the budget easy to read. I like to present a complete budget on one page so the reader can get an overview of the project and see relationships at a glance, even if its just a summary can just be a summary. In some cases such as complex projects or construction you may need to include a more detailed budget breakdown as an attachment.
Developing the grant budget can be part of your grant strategy. Can you strengthen your case for funding through your choice of budget format? Does the budget make the project easier for the reader to understand? By thinking of the budget as another narrative element which helps tell a story, like the needs statement or evaluation, you can add interest to the dry numbers at the end of your proposal.
