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By Thomas Dubois
In these uncertain times marked by increased competition for funding, it is critical to strengthen every part of your application. A well-prepared budget will instill confidence in your project and boost your chances of being funded. Here are a few tips, drawn from lessons learned:
Start Early: Too often, budgets are put together at the last minute after the project design has been finalized, only to realize that the activities and outcomes listed exceed the budget. A thoughtfully prepared budget should serve as a key input for your project design. It will determine what you can afford and influence the scope of your program activities, outputs, and outcomes. Start drafting it as soon as you have identified your initial program design.
Formulas Are Your Friend: As you build your budget, use formulas for all budget items. Budgets always change and formulas will allow you to make modifications much faster. They also ensure that all related costs and totals stay correct as you amend specific line items.
Use Unit Costs: Similarly, when estimating equipment and supply costs, base your calculations on unit costs whenever possible and multiply them by the required quantities. This will help you avoid errors.
Reference Benchmarks: Whether it is for personnel or equipment costs, use benchmarks to demonstrate your cost is reasonable. Benchmarks will show that you care about applying credible costs and maximizing impact.
Don’t include pass-through in your indirect costs: Subcontracts, subsidies (e.g. stipends) are typically not allowed or capped in the calculation of indirect costs. Each funder will have their own rules. Make sure that your formula for indirect costs respects all funder guidelines for indirect costs.
Watch out for caps: Salaries, fringe benefits, indirect costs, and other categories can be subject to maximums set by the funder. Be sure to note these limits and factor them into your proposed budget. Budget items that cannot be included in the grant budget should be allocated towards your leveraged funds.
Do not underestimate your contributions: Leveraged funds highlight your commitment to the project and its sustainability. Be sure to account for all contributions to your program, whether they stem from other grants or in-kind contributions such as labor or equipment. For example, if your actual indirect costs and fringe benefits exceed the maximum allowed by the funder, the difference can be considered as your financial contribution.
Your budget is not (completely) set in stone: Funders will typically give you some flexibility to adjust your budget as the program is implemented; however, they might limit how much you can amend it.
You want your budget to be firm enough and informed by clear budget assumptions, historical costs, and benchmarks so that you will not have to modify it dramatically.
The grant budget and budget narrative can be real assets for your applications if done properly. A carefully defined and justified budget will project professionalism and increase the funder’s level of confidence in your application.
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Thomas Dubois, PMP, CSPO is partner and principal at Amplify Grants in San Diego, California.
