It’s that scary beast: the budget! It’s the part of the application that the program implementers and the innovative visionaries often dread. It’s where details are important and you have to remember the dreaded math.
Here’s some advice from the budget trenches to help you along the way.
1) Read the Guidance
The guidance is the most important tool you will have at your disposal for preparing a winning proposal. It contains specific information that will outline how you should address the funder’s expectations of the budget contents and in some cases a specific format may be required. The guidance may require that matching funds are incorporated into the budget or that specific breakdowns for items like travel are provided.
In some cases, you may find clues (or even direct language) as to what they want or don’t want you to spend the money on. Use these as your guide in developing your budget outline.
2) Determine Allowable Costs
Allowable costs are the items and activities (to include Direct and Indirect Cost) that the funder will consider as an acceptable cost in delivering the grant objectives. All cost should be reasonable and necessary. In the federal grant space, the acceptable costs are outlined in the 2 CFR 200 “Supercircular.” There is usually also a section in the NOFA/FOA/RFP that indicates what the particular program will or won’t fund. Read the content behind the links. If you are unsure, check with your legal team or a grant professional that has federal funding expertise.
On the foundation side, each funder may have their own restrictions on what they will or won’t fund. Be sure to research their giving guidelines before creating the application budget.
When in doubt, ask the funder. If you have a specific line item you are questioning, call the funder’s representative and talk to them about that specific item’s eligibility as part of the program budget. On the federal side, there is always a budget person listed for questions. They won’t bite, give them a call!
3) Do the math
Computer programs and templates are great tools but, not perfect. Take time to check the calculations before you submit. Be sure to use current fringe, travel and indirect rates. If you really struggle in this area, you may want to seek outside assistance for the budget from your accounting staff or a grant professional experienced in grant budgeting and managing grant funds post-award.
Nothing is worse as a reviewer than having a budget that doesn’t add up. It’s hard to trust real dollars to someone you aren’t confident can do basic math!
4) Consider Equipment vs Supplies
Equipment is defined as an item of property that has an acquisition cost of $5,000 or more (unless the organization has established lower levels) and an expected service life of more than one year. If the item does not meet both criteria, then it should be listed in Supplies section. Be sure to talk with your accounting division to determine the threshold established for equipment acquisition. If your threshold is less than that of the federal government, you will need to explain the difference in your budget narrative.
5) Does Budget = Narrative?
Cross-check the project description, narrative and budget to ensure all items discussed do not conflict with each other and that the numbers are consistent throughout. Many times, as the budget comes together numbers change. Go back through all documents and adjust numbers so that all match. It is really important that your top-level budget matches the quotes and subcontractor/subawardee budgets (yes, quotes and sub-budgets are very helpful in getting to the “numbers” part!). This is especially important when it comes to number served and cost per person calculations. Readers will pick up on differences and questions what the real number is supposed to be.
The budget does not have to be the scary monster hiding under your desk. Take your time, develop it as you do the narrative, and, when in doubt, seek assistance.
May the numbers always be in your favor!
Stacy N. Fitzsimmons, MBA is the Owner of SNF Writing Solutions, LLC a business services consultancy. This post was written with the substantial contribution from Leighe Disbro, SNF Writing Solutions Associate.