Grant Guru

Now, you are probably thinking what on earth could be fun about writing a budget? To me it is like a game, not unlike chess. Learning how to put a program into dollar terms is a science and an art, and this is what I find attractive to this part of proposal writing. The budget translates the activities section of your proposal into dollars. How many staff members will you need? What supplies or equipment will be needed? Do you need to hire consultants?

To write the budget, you are required to think through all of the ways you will need money to implement, evaluate and disseminate your suggested program. If the grant is a multi-year grant, it becomes even more complex and you may need to factor in cost of living adjustments. Use your best guess to allow for inflationary costs for changes in salary, amount allocated to materials and supplies, and funds for travel. Most federal government grants require detailed budgets and you use the budget forms provided. Foundations typically require less line-item detail. Budgets are an important part of how a proposal’s merits are evaluated.

To complete the budget, you will must run "what-if scenarios" and figure out how to account for project uncertainties. The best way to do this is to master at least the rudimentary elements of Excel. There are free training courses available at http://office.microsoft.com for PC users and at the Mactopia website at http://www.microsoft.com/mac for Mac users.

At best you will come to an approximation of what you need. Build into to your project a way to change course for corrective action, money for uncertainities, and generally whatever else you see in your crystal ball. Seriously though, spend plenty of time reviewing what you have created.

Most grant budgets break down the expenditure categories into object codes. Here is a common set of account object codes:
1000-1999 - Certificated Personnel Salaries
2000-2999 - Classified Personnel Salaries
3000-3999 - Employee Benefits
4000-4999 - Books and Supplies
5000-5999 - Services and Other Operating Expenditures
6000-6999 – Equipment, Capital Outlay
Indirect Costs at an established rate (excluding the 6000-6999 category)

Your state or your agency may use a similar, but different account code structure. Use what is required and that meets the RFP. Use a spreadsheet to create your line-item budget. The set-up is fairly straight forward, account code, item, cost (I usually include tax and shipping) and a space for comments. Comments are where I jot down justifications, notes and other items pertaining to this expenditure. Later I will need to create a budget justification narrative and these comments will become invaluable. For budget purposes, I write in whole numbers and round as appropriate. Be careful however, sometimes you are trying to hit a specific dollar amount and the rounding functions in your spreadsheet will throw you off a dollar or two.

What are direct and indirect expenses?
Direct expenses are those that are directly related to the project and include staff salaries and benefits, supplies, equipment, contracted services and program-related travel. Indirect costs are simply the overhead costs that your agency will incur by hosting your program. These costs are essential to all programs that your agency provides but tend to be difficult to assign to any one program. For example, your agency has costs associated to the building you occupy and utilities (gas, electric, water, telephones). Some funders (particularly federal and state agencies) will set a maximum allowable percentage for indirect costs. To create a line item for indirect, you total all of your budget costs (except Equipment, Capital Outlay) and multiply it by the set indirect rate of your local agency. These rates change to fluctuate yearly, but a figure around fiver percent is typical in K-12. It will soon be apparent to you why you put a budget together with the use of a spreadsheet. In fact some colleges and universities support their grant seekers with some pretty sophisticated budget templates to use in the preparation of grants. You can find some of these on the web with a search using these keywords "grant budget templates universities." Take a look at the sample provided by Columbia University’s Teachers College. Their Office of Sponsored Programs has posted what they require. It’s a good Excel example of planning for a multi-year proposal, see http://www.tc.columbia.edu/administration/osp/budgeting.htm for details.

Next week we will look at the steps in the budgeting process so you have an idea about how to go about this task.