1. Grants Development PBS 136 – Grantsmanship November 10, 2008 Chapter 7 - Budgets

2. Today’s Agenda Presentation: Tiffany Haworth, United Way Nonprofit Leaders Network: 6:00 – 7:00 Break: 7:00 – 7:15 Review Chapter 6: 7:15 – 7:30 Go over Chapter 7 (Budgets): 7:30– 9:00

3. Future Presenters December 1 st : Michelle Jones - Associate Director, Office of Community Capacity Building, Virginia Department of Housing and Community Development. December 15 th : Jeffrey Mansour - Senior Program Officer, The Harvest Foundation.

4. Budgets Budgets are: Strategic. Bring depth to your Project Description. Aligned with you objectives. Three parts to the Budget Section: 1.Expenses 2.Revenues/income 3.Narrative

5. Budgets Expenses: -Direct: -Personnel. -Non-personnel. -New. -Existing and ongoing. -Can be in total, percentage based or prorated. -Can be estimates.

6. Budgets Expenses: -Direct (operating): -Management/supervision. -Occupancy (rent/lease). -Telephone. -Utilities. -Office supplies. -Computers. -Also can be prorated.

7. Budgets Expenses: -Indirect: -Administrative staff. -Audit/accounting fees. -Equipment rental. -Fundraising costs. -Insurance. -Legal. -Occupancy. -Utilities

8. Budgets Expenses: -Indirect: -All project grants should try to recover indirect costs. -Projects do not occur in isolation. -Talk to funder about indirect expense allocation policies. -In general, two methods: -Adding a percentage to the entire grant. 10%- 20% is typical. -Line by line allocation.

9. Budgets Expenses - Suggestions for development: Keep the detail… create notes. Your financial officer/accountant is your friend. Learn and use a spreadsheet package. It’s listen as an expense now… It will become a management objective afterwards. Be very conservative (err on high side). Reporting is key. Create a solid tracking process.

10. Budgets Revenues: Not necessarily needed? Why? Show when: –Other grants. –Other income: From organization From project activities (earned income). With earned income include projections only. –Matching requirements. –Difference between expense and revenues can be your grant ask.

11. Budgets Revenues - Suggestions for development: Be conservative (err on low side). Keep the detail. Only include revenue if you are absolutely certain it is needed/can be obtained. Never include potential grants, only cash in hand. Occasionally grantors will ask for a list of other grants applied for. This is NOT to be included within your revenue projections. Seek help if inexperienced.

12. Budgets What happens if… I under estimate expenses? Revenues? I over estimate expenses? Revenues? Funders look poorly upon organizations who either leave too much money at the end of a grant or who run out of money prior to the end of the project.

13. Budgets Narrative: Used to explain budget. Can provide further detail. Can provide rationale, methodologies or formula. Two ways to present: 1.Notes. 2.Straight text. Basic budget info does not belong in the budget narrative but elsewhere in the proposal. Keep to the detail or explain the unusual in the budget narrative.

14. Budget - Tips Focus on the cost-benefit ratio. Clarify how grant dollars will be maximized through a frugal budget, how the grant will leverage other funding, and how the benefits will be long-term. Budget line items should reflect the values of your organization (mission). Check for consistency between the project description, budget narration, and budget line items.

15. Budget - Tips Far too many organizations arbitrarily request an extra computer or half-time clerical assistant with every application submitted; foundations recognize these as unnecessary budget inflation. Aim for management efficiency. If your Executive Director position is already funded, then five percent of this individual’s time can be allocated for project oversight at no additional cost. Show in- kind contributions outside of the budget or if the are a direct cost offset. If major pieces of equipment drive up total budget costs, investigate whether the equipment can be shared with other nonprofit organizations or whether second-hand equipment would provide a reasonable substitute.

16. Budget - Tips Include an inflation factor and projected salary increases when applying for multi-year grants. Some grant experts recommend that budgets aim for no more than 40% personnel costs, with 60% for direct program support. This guideline does not always apply. For staff, identify the percentage of time that each individual will spend on the project and pro-rate the costs appropriate. Do not double-dip if already cover by another grant.

17. Budget - Tips Calculate fringe benefits and payroll taxes on the exact cost percentage, based on information from your human resources department and the specific job classification. Government funders will often allow the fair market value of furniture, computers, equipment, and a designated percentage of office space to be included as part of the required nonprofit financial match. This type of overhead cost may not be appropriate for private foundations (prefer cash). Beware of including minimal costs (e.g. letterhead, postage, photocopying) if not essential to project operations. Consider including operational costs only when directly impacted by your project.

18. Budget - Tips Keep training costs reasonable. Capacity building related to the success of your organization can be considered viable/grant-worthy training. Be cautious about including non-essential travel in the budget for a project that only has local impact. If conference attendance is of vital importance for project effectiveness or results disseminations, identify the conference and provide ample justification in the budget narration. Use only whole numbers (no cents) with proper formatting: $1,270 (not 1270).

19. Budget - Tips For pilot projects, a modest “contingency” line item might be appropriate, but allowed expenditures must be carefully defined and examples given. Do not include a “miscellaneous” budget category. Small expenses should properly be allocated for supplies, transportation, photocopying, or a similarly appropriate category.

20. Useful Websites http://www.grantproposal.com/ http://foundationcenter.org/getstarte d/nonprofits/http://foundationcenter.org/getstarte d/nonprofits/ http://www.grantstation.com/Public/ Funding_Strategies_px/funding_strat egies_main.asphttp://www.grantstation.com/Public/ Funding_Strategies_px/funding_strat egies_main.asp http://www.grants.gov/applicants/ap p_help_reso.jsphttp://www.grants.gov/applicants/ap p_help_reso.jsp