Faithful readers will remember our post “Seliger’s Quick Guide to Developing Federal Grant Budgets.” This is a companion post for developing foundation budgets.
Unlike federal budgets, foundations rarely provide budget forms, or, if they do, the form is usually fairly simple and most grant writers, even novices, should be able to figure out how to complete it. The challenge is deciding what to present to the foundation and what format to use when a budget form is not provided. We opt for a simple Excel spreadsheet. If the concept of using Excel makes you break into a cold sweat, stop reading and learn how to use Excel immediately. I could place an illustration of a typical foundation proposal spreadsheet here, but we never post sample work products. For our reasoning, see “If You Want Free Samples, Go To Costco; If You Actually Want Proposal Writing, Go To A Grant Writer.” You’ll have to use your imagination to visualize what the spreadsheet should look like, but you’re grant writers and should have at least a soupçon of imagination.
Most of the foundation proposals we write are for project concepts involving operating support, a human services delivery project, start-up costs for a new nonprofit, or a capital campaign. The following applies to the first three (I’ll write a future post discussing capital campaign foundation budgets, which are structured differently):
- Place a descriptive title at the top of the spreadsheet, such as “Project NUTRIA Three-Year Line Budget Spreadsheet and Justification.” Don’t forget to add your agency name above the title.* I like the look of the Center Across Selection tool in Excel, but choose your own actual formatting.
- We use two broad line item categories: “Personnel” and “Other” in column A, which is usually titled “Line Items” or similar.
- Starting with a “Personnel” header, list each administrative or project position as a line item row in descending order from the Executive Director down. Provide a subtotal row, then a row for fringe benefits. It is not necessary to itemize fringe benefits. Instead, express them as a percentage of the personnel subtotal in the first calculation column. Finally, provide a Personnel Total row.
- Everything else goes into “Other” header. Provide enough line items to cover the activities noted in the proposal, but not so many as to make the spreadsheet print on two pages or be otherwise difficult to read. Typical “Other” line items include local travel, professional development, equipment, printing, communications, insurance, hourly staff (e.g., tutors for an after school program) expressed as hours (there are 2,080 hours in a person year, so two FTE tutors = 4,160 hours) in the first calculation column times an hourly rate in the second calculation column, and so on. Provide an Other Total row.
- Provide a Total Cost row, which is the sum of the Personnel and Other Totals. If your agency uses an indirect rate, the Total row will be called Total Direct Costs, followed by an an Indirect Costs row (expressed as a percentage of Total Direct Costs in the first calculation column) and a Total Project Costs row.
- Moving across the spreadsheet from column A (line item names), the next two or three columns should be for calculations (e.g., numbers, months, percentages, etc., so the readers can figure out how your formulas are derived). The next three columns will be Year One, Year Two and Year Three yearly totals. The formulas in these cells will be multiplications of the calculation cells for each line. The next column will be the project period total for each line line.
- The last column should be larger and be titled, “Narrative Explanation” or similar. Place a brief description of the line item (“10 iPhones @ $200 ea. to enable Outreach Workers to connect with participating at-risk youth through social media, as detailed in the attached project narrative”). As I discussed in my post on federal budgeting, I see no reason to have long-winded budget narratives that regurgitate the proposal like Jon Voight by the eponymous snake in Anaconda.
- Provide a bottom sum row for each project year and the project budget year total, perhaps with a cost/participant total, and you’re done.
- Actually, you’re not quite done, as you will have to struggle with font sizes, row heights and such to get Excel to print the spreadsheet on a single, readable page. But grant writers love struggle, so this should be the fun part of the exercise.
It is OK to estimate most line items. As with all budgets, however, the most important aspect is to make sure that the budget is consistent with the narrative. For example, if the narrative discusses having Outreach Workers using social media to engage at-risk youth, there should be a line item in the budget for the cost of buying the phones and/or computers, as well as a separate line item for phone service charges. Also, I like round number budgets—say $250,000/year for a $750,000 project total. The round number can be easily achieved by making one row (e.g. participant incentives or advertising) a “plug number” (guessed flat per year number for a particular line item), rather than a calculated total. Keep adjusting the plug number in each year until you achieve the round number.
Although this kind of spreadsheet may seem too simple, it will provide enough detail for the foundation to understand your budget request. If the foundation gets interested in funding the project, you’ll know because, in most cases, the foundation will request additional budget details.
* “The Name Above the Title” is the title of a 1991 CD by the somewhat forgotten folk-rocker John Wesley Harding. I’ve been asked many times about the music I listen to while writing proposals. One of these days, I compile a playlist or two and post them. J.W. Harding might be on one of them.