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An introduction to developing and managing grant budgets.
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UNH ManchesterMaster of Public Health Program
Deb Sugerman, Ph.D.www.debsugerman.com
October 22, 2009
An Introduction to Developing and Managing a Grant Budget
Part I: Developing a Grant Budget
What is a Grant Budget?It is simply the process of translating the project
plan into fiscal terms.How much will it cost to successfully complete your
project/program?Where will the money come from and how will it be
used?It is critical to the success of the grant proposal that
the project budget reflects and supports statements made in the project narrative.
WARNING!Funders judge whether or not you have the
capability to run your project/program through the budget.
Mistakes made in a budget can result in your organization being professionally and legally committed to a project whose resources are inadequate. Plan the budget carefully.Be as realistic as possible.
Before You BeginLearn the ground rules from both your
organization and your funder.Check with your organization to find out how
budgeting works (indirect costs, benefits, etc.).Check your funder’s requirements to make sure you
understand their process and don’t ask for something they don’t fund.
Steps in the Budget Development ProcessStep 1: Identify the total costs of the project.
Step 2: Arrange items by category, by time frame, and by anticipated source.
Step 3: Transfer your data into the format requested by the funder.
Step 1: Identify Total CostsGo through each section of your narrative and
brainstorm costs involved.List all anticipated costsExamples might include staff, equipment,
transportation, etc. Include costs even if they are in kind (i.e., volunteers,
books, materials, etc.)Try to think of everything that will be needed
Direct CostsExpenses directly attributed to the
project/program:Personnel (salaries/wages, benefits)Contract servicesTravel and per diem expensesFacilitiesEquipment, supplies/materials
Check with your organization to find out about benefits, per diem, etc.
Check with funder to find out what is covered
Indirect CostsCosts related to the infrastructure necessary to
support the program/project, but are difficult to separate out (also called overhead costs).Lights, heat, rent, depreciation of equipment, etc.Usually calculated as a percentage of the direct costs
(check with your organization to see what they suggest).
Check with funder to find out what is covered.
Project TeamsChoose a simple project that you want to be grant
funded1-3 years in lengthConcrete, attainable objectives
Examples: 1 week diabetes camp for youth, single parent monthly support group, fall prevention training for nursing home staff, etc.
Brainstorm all the costs involved in the projectList out any and all ideas
Step 2: Arrange Budget ItemsOrganize your brainstorm ideas into specific
categories (i.e., salaries, contracted services, equipment, marketing, printing, travel, etc.)
Organize by category, by time, and by sourceCategory: personnel, other direct expenses, indirect
costsTime: how much you plan to spend each yearSource: where will funding come from (self, funder,
other sources)
Project TeamsOrganize your brainstorm ideas into categories, by
time, and by source. Use general categories (personnel, other expenses,
indirect expenses) and then break down further.If your project spans more than one year, estimate
costs per year.What other sources of revenue do you foresee (in
kind, other grant awards, other possible sources of funds)?
Step 3: Format DataBudget formats vary depending on what each
funder wants to know.Use the format suggested/required by the funder.
Budget ConsiderationsResearch costs to keep the numbers as realistic as
possible.Research the funder to know total dollars available,
minimum/maximum awards, average award, whether they have funded what you are asking for.
Consider asking for no more than the average grant amount.
Continually review, revise, and refine the budget.Asking for a specific amount ($18,750) instead of a
round number ($20,000) makes your request look more authentic and less impulsive.
Project TeamsTransfer your data into the Endowment for Health
spreadsheet.Look at examples to see what is included and how it
is listed.
Budget NarrativeThe budget narrative (justification) expands on line
items, explaining how you arrived at dollar amounts and giving enough detail to tie the costs to the project’s activities and goals already described.
As with the entire proposal, budget narratives should be clear and concise.
Look at the Endowment for Health example to see how this funder expects the budget justification to be written.
Red Flags in the Budget NarrativeThree additional considerations will help the
narrative avoid raising any unnecessary red flags.Make sure the narrative matches the line-items
exactly (do your addition correctly). Make sure the total amount is commensurate with
the outcomes of the project/program (the amount should make sense in terms of what you propose to do).
Use fair and reasonable costs (do your homework).
Final Budget ChecklistTells the same story as the proposal narrative.Sufficient to perform all the tasks in the proposal
narrative.Contains no unexplained amounts or a
miscellaneous category.Includes only those costs to be incurred during the
grant period.Follows funder guidelines.
Part II: Managing the Grant Budget
Grant Award NegotiationWhen the award is substantially the same as
specified in the original proposal, no negotiation is needed.
A funding agency may decide to support a project at a different level from that requested (usually at a reduced level).
Negotiation process:Notification from funderInvolvement of institution
Purpose of Grant ManagementTo define what’s expected and approvedTo provide budgetary controlsTo guide staff as they execute the programTo reflect upon your performance
Poor Grant ManagementFailure to effectively plan and monitor the costs of
a project can result in;Funds reduced or withdrawn at fiscal boundariesDisallowed expensesProject terminationHarm to your reputation
Steps to Effective Grant ManagementStep 1: Develop a realistic and defensible plan
Step 2: Pay attention and carefully monitor progress
Step 3: Manage the unexpected
Step 1: Develop a Realistic and Defensible Plan
Good budget planning is a key part of budget management.
Know your grant budget.Read the fine print to make sure you know what the
funder is requiring of you. You cannot change your mind after the grant is
approved.Grant dollars must support the program and must be
spent for the services and commodities specified in the grant application.
Step 2: Pay Attention / Carefully Monitor ProgressRecordingDevelop an effective, efficient system to:
Track and document expenditures Ensure adherence to funder guidelinesProvide a clear audit trailAssure budget modifications are properly approvedProvide a feedback loop to program personnel
Pay Attention / Carefully Monitor ProgressReportingDevelop a system to deliver timely, accurate
information in easily interpreted formats.Reports should contain three easily identifiable
numbers: list of expenditures to date in identified accounts, projected costs, remaining balance in each account.
Reports should show whether the grant will be over or under spent.
Keep the funder informed if there are potential problems.
Step 3: Manage the Unexpected
DOLook for early problems and develop possible
solutions.Alert your institution.Ask for help from your organization and from the
funder
Manage the UnexpectedDO NOTRob Peter to pay Paul (cost transfers). Ignore the problems and hope they’ll go away.Hurry up and spend money at the end of a contract.Assume that your organization will cover cost
overruns.Lie!
SummaryGood ideas require good money – that’s why we
write grants!Becoming proficient at developing and managing
grant budgets will ensure that your good ideas will continue being funded.
ResourcesHall, M. & Howlett, S. (2003). Getting Funded: The
Complete Guide to Writing Grant Proposals, 4th Edition. Portland, OR; Portland State University Continuing Education Press.
www.grants.govThe Grantstmanship Center (www.tgci.com)The NH Center for Nonprofits (
www.nhnonprofits.org)