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Budgeting For Your Grant

When you're dreaming up a new project, it can be hard to estimate how much money you'll need/want to ask for to get it rolling. It can be tempting to just find the biggest grant out there and ask for the maximum amount they'll give. This is not a good strategy. Nor is going for an amount that's only a tiny fraction of what you need and saying "well, something is better than nothing." Not if it's going to put you underwater running a project that you can't afford. Instead, it's best to figure out a rough estimate fo what you need before you choose your grants. Breaking your costs down into categories helps. Here are the categories most commonly used in grant budgets.

Image: Stock photo of someone budgeting.

1) Personnel.

Who will be working on your project, and how much of their time will be dedicated to it? If you'll be hiring people specifically to work on this project alone, then they're at "100% effort." If your director will manage this and 3 other projects, they may be at "25% effort." Figure out everyone involved's salary or what you hope to hire them in at. (Don't be cheap and say you're going to hire a teacher at $30,000 a year full time. Funders will not be impressed. They want you to offer fair market value for salaries - after all, they are charitable organizations.) If you're going to hire an administrative assistant at $40,000, but they will spend half their time working on things outside the scope of your proposed project, you would write "$40,000, 50% effort." You would then be asking the funder to cover $20,000 of that person's salary while you covered the rest. Grantors want to see that you are also investing in your employees, so you'll want to have at least a couple who are not fully grant funded. Remember, you can write in your own salary, too - just be sure you're not over-paying yourself, especially in comparison to your other employees. I typically see non-profit leaders paying themselves $50-75k a year, but their effort is almost always divided between numerous projects.

Image: Stock image of a work team.

2) Capital Costs.

Capital costs are often things like building renovations and purchases. Occasionally they're even land if you are in an industry like farming. Realize that large capital costs will limit your grant options - many won't cover these costs - but if you need them, well, you need them. Just make sure any grant you consider will allow these expenses. Capital costs like remodeling or renovation often come with contractors too, so be aware that there are sometimes specific rules governing how contractors can be used and bidding.

3) General Operating Costs.

Again, some grants will not allow these (though they are more commonly allowed than capital costs.) Operating costs are essentially those things that keep the business/non-profit humming: rent, utility costs, wifi, printing costs, etc.) They may not be related to one specific project, but they're needed to be able to do any project.

4) Technology.

Some tech is needed for almost any project these days. You may require tablets for health practitioners or students, specific software, payment technology, smart boards, printers, or computers. When you factor in these costs, remember accessories: chargers, keyboards, headphones, etc, as well as the cost of ongoing software subscriptions.

Image: People using virtual reality technology.

5. Travel. Will you need to fly in job candidates and put them up in a hotel? Will your staff need to go to special conferences or training sites? Many of these things can be done online, but some things (like interviews and conferences) are just better in person. Feel free to include travel expenses. Be specific in breaking down airfare, hotels, per diems for food, and rental cars or rideshares. There are per diem charts available online that show government per diems for food in different cities.

6. Training. If your staff will need training, include the cost of any conference registrations, webinars, books, speakers you'll be bringing in-house, etc.

7. Supplies. These will vary wildly based on your industry and project. They can be educational materials, games and play supplies if you work with children, notepads, medical equipment, etc. The biggest question people ask about supplies is how specific they need to be. One of my clients right now is asking for weight equipment for his high school's football program. He doesn't want to just say "$30,000 weight equipment." He wants to break it down by type of system he'll use. So he might say "Monster Rig Lite Weight System: $5000 x 2" indicating their cost per unit and how many he needs, then "Monster rig safety strap system: $500 x 5" etc. Those are bigger purchases and need to be fairly specific. If you're not sure exactly what model of smart board, weight machine, etc that you'll want, just research their average costs and go with that. For small supplies, like pens, there's no need to say "G2 Gel pens, $3.13 per pack of 2 x 36", you can lump that into a category like "writing supplies" and include pens, pencils, notebooks, and printer paper.

Image: Office supplies.

8. Start-up costs.

In some grants, these are separate from your yearly budget. These can include capital expenses like remodeling, permits, insurance, lawyer fees, etc. Be sure to read carefully to see if these can be covered.

9. Food.

My favorite category is unfortunately NOT covered in most grants, especially if you work in the world of education. If you're hoping to incentize college students to attend a certain program by offering pizza, you'll likely be out of luck. However, I have seen food covered in some grants for things like daycare programs. Again, read carefully to see what the rules are around this.

Image: pizza boxes.

10. External evaluation.

Many large grants (especially in education) require external evaluation so the funder can be sure your results were checked by a neutral party. If an external eval is required, you have to include it in the budget. Most external evaluators will charge 5-10% of the total cost of your grant. It's an obnoxious, arbitrary way of pricing. (I don't follow this rule when figuring out what to charge for this service because it seems like a way to just suck as much money as possible from a client with a big grant), but it can be helpful for estimating what you'll need to spend.

You will occasionally see other categories like transportation, but the 10 above are the big things to consider. If you can figure out roughly what you'll need to spend in each of those categories, then add them together, you'll have a good idea of what you'll need to ask for. Don't inflate that number. Ask only for what you need to complete the project. You will end up picking up some expenses yourself, or having them picked up through other funders, and that's ok. Funding non-profit projects is a team effort. Your grantor doesn't want to be the only patron at the table. Instead, you'll need to develop a constellation of funding streams in which grantors are only some of your stars.


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