Budget planning is an integral part of program planning. “Think of the budget as the bones of the program,” said Barbara Floersch, chief of training and curriculum of The Grantsmanship Center in Los Angeles, Calif.
“Without the bones, the program can’t go anywhere. Never wait until the whole program is planned before figuring out what it will cost,” according to Floersch. To put the essential budget pieces in place, she offers the following three tips.
First, answer the following eight questions for every program activity, from direct client services to program support such as payroll administration. Answering these questions will help you hammer out line-item totals and related administrative support needs:
- Who will do the work?
- How long will it take?
- What’s an adequate pay rate?
- What supplies and equipment will be required?
- What logistical support will be required?
- Where will activities take place?
- Will anyone have to travel? What will the reimbursement rate be?
- Will the activity require supervision or oversight?
Second, ask yourself from where the resources will come. Will they be included as part of the grant request, be covered by other cash income, be supported by your organization’s general fund, or be contributed as in-kind donations?
Third, categorize expenses as direct or indirect. Some line items will be easily categorized, while others will be tricky. “Those decisions will be driven by your organization’s financial policies as well as the funders’ requirements,” said Floersch. “The structural and logistical support indirect expenses include are essential to a program’s success and to the health of your organization. Be sure to consider them because someone is going to have to pick up the tab.”
“Be thorough and price things out so that line items aren’t based on guesses,” said Floersch. Approaching the task this way will expose budget problems early so that you’ll have time to solve them or to make critical no-go decisions if financial complications you encounter will take more time to work out. © Copyright 2018 The Grantsmanship Center.