Application 8.2

Program Budget

Overview:

For the grant writer, putting a dollar figure to an idea can be vexing. Yet, the budget is the first step in understanding the true costs associated with making your dream a reality. While the grant requirements may necessitate a different type of budget, the spirit behind the request is putting dollar figures into ideas. The budget narrative provides the details behind the line items in the budget and is essential to the justification process. The narrative explains what to include (matching funds and nuances of the budget) that may be lost elsewhere in the grant. Some grant reviewers rely heavily on the budget, while others find value in the budget narrative, but both are important parts of the grant writing process.

When approaching the budget section of a grant application, it is vital that the grant writer already have a basic understanding of what a budget is, and the general components that make up a budget. Serving as the financial plan for the grant period, budgets reflect the agency’s priorities in assets, liabilities, and equity. Assets are anything an agency owns that has value, such as programming material already purchased, revenue, or capital (like equipment or owned facilities). Salaries, expenses, and debt can be categorized as a liability, which is something that an agency owes to someone else. Budgets reflect the effectiveness and efficiency of resource allocation illustrated through the budget, which can determine whether an agency receives funding.

Drafting a Budget – In Three Easy Steps

Step 1 of creating an impactful budget starts with the creator fully understanding the grant requirements and doing the required research. Some grant applications require an operating budget for the organization, which includes all income, expenses, and other assets needed to achieve the organization’s mission. Some grant applications merely desire a program budget where the organization isolates funding specific to the program or project, not the entire organization. Knowing what the prospective funding agency requires with the budget is an essential part of the planning process.

The research portion of a budget starts by gathering the resources necessary to put numbers with ideas. This typically begins with examining expenses such as personnel (salaries and wages), direct costs (expenditures associated with production or provision of a service such as materials, supplies, equipment, and personnel), and indirect costs (general expenses related to operations such as rent, office supplies, utilities – items not directly tied to the program/project outcomes). As discussed in Chapter 6, a logic model can be a great place to start, because of the visual representation of what it takes to offer a program. By examining the inputs, outputs, and outcomes, one can get a good sense of the expenses associated with developing a program.

A budget is a blueprint of what you want to achieve. Therefore, step 2 of developing a budget is identifying and then communicating the who, what, when, where, how, and why of the program. The who of the budget discusses the individuals carrying out the program or project, as described in the grant proposal. This may include instructors, administrative team, or even volunteers. The what explains the expenses needed to run the program, including direct, indirect, and in-kind costs (goods and services provided versus cash). When will the project/program take place? It is important to understand the timeline of the project, and when funding is needed through the budget to the funding agency. The grant writer may find that the funding timeline, presented by the agency they are applying to does, not align with the organization’s budget cycle. The where includes the actual location; the why is important when keeping track of outcomes, and when creating a budget, includes closing the loop from an evaluation standpoint.

The 3rd and final step of the budget process is putting text and meaning to numerical values. The budget narrative provides descriptive details and justification for the line items on a budget sheet and may serve as the subject of review for funders. The budget narrative explains why the funds are needed and is usually a companion to the written budget. It also provides the opportunity to connect line items to the organizational objectives.

Assignment:

Based on the following scenario, create a line-item budget proposal for the program. Is there enough revenue to cover the cost of the program? If not, what is the amount needed to cover all expenses in the program?

Bike On:

An organization wants to start a program for youth in the area, whose mission is to promote healthy lifestyles through cycling. The program is open to 15 youth. The program will have two facilitators working for $10 an hour, for eight hours. A challenging course will be utilized for the program. The course rental is $50 an hour and is needed for eight hours total. Three bikes ($120 per bike) need to be purchased. $100 will be spent on supplies including snacks, paper, drinks, cups, and napkins. Revenue for the program includes $10 per camper and a $200 donation from a local business. In addition, 25 shirts will be ordered, costing $10 per shirt.