Who's Afraid of a Big, Bad Budget?May 12, 2023
by Laura Chynoweth, CEO of Granted
This post was originally published on The Grantsplainer on 10/23/2019.
“I CAN’T DO BUDGETS!”
My fellow consultants and I hear it over and over again from clients: “I can’t do budgets!”
In theory, if you already have a running program, you should already have a budget. However, we get it. With the nonprofit staff turnover rate increasing continually, there is a good chance you may have inherited a program with an out-of-date (or missing) budget. And this may not bother you…until you are required to attach a program budget to your next grant application.
“Can you do the program budget part of the grant application for me?”
We grant consultants cannot do the line item research for you, but we can certainly help you along the way! And rest assured: If you can create / run a program, you can create a budget.
“How do I even start?”
Like this! Here are some simple steps and loose guidelines to help you fill in that budget form and attach it to your grant application with confidence:
A program budget should reflect costs for the overall project, not just the costs the requested grant amount will cover.
In every grant application, you will need to explain what the funding you are requesting will be used for. Don’t be afraid to get specific. (e.g., “The $1,000 requested from the Super Awesome Foundation will be used to purchase one stainless steel water bottle for each middle school participant of the after-school basketball program.”)
But grant makers also want to know how their contribution will fit into the project or program as a whole, which is why they want to see the entire program budget. They want to see that their potential contribution of a $1,000 grant could help you cover a fifth of your total program costs of $5,000. A program budget will also help grant makers see what the remaining $4,000 in program costs are for (i.e., if you are allotting appropriate amounts to various line items).
Make sure your program budget fits into your organization’s annual operating budget.
In addition to your program budget, you’ll need to attach your organization’s annual operating budget to every grant application you submit.
Note: the requested grant amount is to the program budget as the program budget is to the organization’s annual operating budget. Make it easy for grant makers to see where the total cost of your program fits into the operating costs of your organization as a whole.
For example, if you are applying for a $5,000 grant for a program that costs $10,000 total to run according to your program budget, but then your annual operating budget lists $9,000 under the line item “program expenses,” something doesn’t add up.
Remember that you are the expert on your program.
You are the one who knows what brand, type, and how many water bottles you need for each participant in your youth basketball program. You are the one who knows how much you are paying the program coordinator to oversee all the teams and volunteers. You are the one who knows how much money you have allotted for program coordinators to spend on gasoline and mileage (or airfare if necessary) for this program for the year. You get the idea.
This is why we fundraising consultants cannot create a program budget for you. This is also why grantmakers ask you for the numbers instead of specifying that they will only fund your program if you spend a certain amount on water bottles, for example.
Include a budget narrative whenever you can.
You’ve already done all the pricing work to fill in your budget line items. Now use your notes and take the opportunity (even if it’s not required) to create a budget narrative. This is your chance to explain why you came up with the numbers you did. This should be easy, since you were the one who did the research. You should be able to easily explain how many water bottles the $1,000 you listed should cover, why you are budgeting $100 for travel, etc. No one is expecting you to speak like a Wall Street financial guru. Be brief and use layman’s terms.