Zimmerman Lehman : "Proposal Budgets: Be Sure To Get What You Need"

"Proposal Budgets: Be Sure To Get What You Need"

The following article is excerpted from our published edition of Grantseeking: A Step-by-Step Approach.

Budget preparation is difficult work! When staff members of nonprofits have three months to prepare proposals to private and public grantors, they often spend two months and 29 and one-half days preparing the narrative, and four harrowing hours (if that) throwing the budget together. Budget preparation requires imagination and painstaking work. Give it the time that it deserves!

Budget preparation requires imagination and painstaking work. Give it the time that it deserves!

In most cases you will be applying to grantors to fund special projects, not general operating expenses. As those of you who are familiar with the foundation world know, it's the rare foundation that will pay for general operating expenses. Your full organizational budget should certainly be included as an attachment, but it should not be confused with the special project budget that I will discuss here. Let's examine some typical mistakes nonprofit staff make in preparing special project budgets.

Personnel
In the personnel category, two problems show up time and again. First, those who prepare proposal budgets tend not to think clearly about the amount of time that staff will need to accomplish a particular project. Let's say that Jane will be the director of a parenting training program. In addition to these new responsibilities, Jane is also responsible for counseling individual clients and running support groups for battered women.

What percentage of Jane's time should be allotted to the parenting skills program? This takes time to figure out, particularly if the parenting program is a new responsibility for Jane. If the proposal writer is unsure whether Jane will spend 25 percent or 35 percent of her time on the parenting skills project, the request should be for 35 percent. It's better to have too much money than too little. If it turns out that Jane needs fewer hours but the program's telephone bill is twice what had originally been budgeted, money can be moved from one category to another as long as the Fabulous Family Counseling Center gets the permission of the foundation program officer to make that move.

(By the way, the Center must be careful. If 35% of Jane's time is paid for by Grant A, 50% by Grant B, 40% by Grant C, and so on, it may turn out that 215% of her time is "accounted for" by grants. This is not kosher and will get the Center in trouble with funders and the IRS.)

A second problem stems from what I term "professional-itis." Some proposal writers do fine when it comes to asking for funds for professional staff, but they pay scant attention to support staff. If one-half of an attorney's time at the Eastern Slope Legal Aid Program is to be devoted to a new environmental law program, it stands to reason that a portion of a support staffer's time will be necessary to assist that attorney. Don't forget support staff! If you fail to ask for funds to pay support staff in proposal budgets, you'll have to come up with the money elsewhere. The foundation will NOT call you up to remind you, that you left out a portion of an administrative assistant position. When presenting the personnel portion of t he budget, it should appear as follows:

POSITION: Trainer
SALARY: $60,000
% OF TIME: 50%
$$ REQUIRED: $30,000

For our friend Jane, under "Position," you wrote "Trainer." Under "Salary," you wrote $60,000. Under "% of Time for this Project," you wrote "50%." The $ required, therefore, is 50 percent of $60,000, or $30,000.

The grantor will also pay for a portion of staff fringe benefits, but not unless you ask for them! In my experience, if your rate for fringe (which might include such items as health insurance, Social Security, FICA, etc..) is 25% or less of salaries, you can simply plug in a percentage. In other words, if you're requesting a total of $100,000 for salaries for this particular project, you can also request 25% of that $100,000 (or $25,000) for fringe benefits. If your fringe benefits exceed 25%, I would recommend itemizing it to show the grantor where her/his money is going.

If you plan to hire a consultant for the project, the consultant's fee should be written below the salaries and fringe section, because you will not be paying the consultant's fringe benefits. These fees should be broken out on a per-hour or per-day basis.

Non-Personnel
A tragic mistake that some nonprofits make is neglecting to ask grantors to pay non-personnel expenses! At this juncture, we uncover one of the great but unheralded truths of grant solicitation: The distinction between "special project" grants and "general expenses" grants is largely illusory. If you use your imagination and common sense, many of your agency's operating expenses can be offset by special project grants.

Grantors, be they foundation program officers, corporate community representatives, religious donors or government personnel, aren't stupid. They understand that you need to have a building in which to house your program, a paid-up utilities bill to enable you to turn your lights and computers on, paper and pens, etc. A portion of your operating expenses can and must be apportioned to your special project budgets. Again, if you fail to do it, you won't get a phone call from your friendly foundation program officer informing you that you neglected to ask for a computer, file cabinet and desk for your new environmental attorney.

NON-PERSONNEL EXPENSES INCLUDE THE FOLLOWING:

Rent and utilities
Telephone and fax
Printing
Postage
Office supplies
Office equipment
Computer costs
Copying
Staff travel
Corporate insurance (liability, board and malpractice)
Book and magazine purchases
Fundraising expenses
Advertising
Memberships and professional expenses

Most special project proposal budgets do not include enough of the above categories. If you can forge a legitimate connection between the project and the budget item, ask for the money! A final note: resist the temptation to plug in an "overhead" percentage to cover non-personnel expenses. Grantors prefer that you itemize these expenses, and you'll almost certainly ask for and receive more money if you itemize.