3 steps to justifying the budget

August 11, 2015       The NonProfit Times      

A solid budget is an essential ingredient of a winning grant proposal. Grantseekers usually understand that the budget must be reasonable — that is, appropriate to support the proposed work — and must add up (and across and down). “But even a reasonable, accurate budget can sink a proposal if it doesn’t sync exactly with the narrative,” said Barbara Floersch, executive director of The Grantsmanship Center, in Los Angeles, Calif. “The budget’s got to tell the same story, but in the language of dollars.”

To definitively link the narrative and the budget, include a budget justification with each proposal, unless instructions forbid it. “By the time funders review the budget, they might have forgotten important program details,” said Floersch. “A narrative justification is the best vehicle for explaining how each expense fits into the program and how you calculated the numbers.” To construct a powerful budget justification, Floersch recommended the following:

Divide the line-item budget into categories (Personnel, Supplies, Facilities, etc.) and number each line item within each category. When preparing the justification, number each item to sync with the line-item budget. This bit of housekeeping lightens the reviewer’s load.

The line-item budget must show requested grant funds, as well as additional cash and in-kind resources that will support the program. Be sure the justification also addresses items that will be covered by the additional cash and in-kind support. “Without this information, reviewers won’t have a full picture the program costs,” said Floersch. “And if the additional resources are a required ‘match,’ the justification can prove that these items are essential to operating the program and were calculated realistically.”

When justifying each line item, include the following: Number and name of line item (i.e., (1) Executive Director); a breakdown of how the expense was calculated (i.e., 10% of FTE at salary of $65,000 = $6,500); an explanation telling the reader how the line item fits into the program plan and why the expense is necessary.

“Preparing a thorough budget justification can be tedious,” said Floersch. “But it will give a huge boost to the competitiveness of your grant proposal.” Take the time to thoroughly explain how the funder’s investment will be used. ©Copyright 2015 The Grantsmanship Center. All Rights Reserved.