UNH ManchesterMaster of Public Health Program

Deb Sugerman, Ph.D.www.debsugerman.com

October 22, 2009

An Introduction to Developing and Managing a Grant Budget

Part I: Developing a Grant Budget

What is a Grant Budget?It is simply the process of translating the project

plan into fiscal terms.How much will it cost to successfully complete your

project/program?Where will the money come from and how will it be

used?It is critical to the success of the grant proposal that

the project budget reflects and supports statements made in the project narrative.

WARNING!Funders judge whether or not you have the

capability to run your project/program through the budget.

Mistakes made in a budget can result in your organization being professionally and legally committed to a project whose resources are inadequate. Plan the budget carefully.Be as realistic as possible.

Before You BeginLearn the ground rules from both your

organization and your funder.Check with your organization to find out how

budgeting works (indirect costs, benefits, etc.).Check your funder’s requirements to make sure you

understand their process and don’t ask for something they don’t fund.

Steps in the Budget Development ProcessStep 1: Identify the total costs of the project.

Step 2: Arrange items by category, by time frame, and by anticipated source.

Step 3: Transfer your data into the format requested by the funder.

Step 1: Identify Total CostsGo through each section of your narrative and

brainstorm costs involved.List all anticipated costsExamples might include staff, equipment,

transportation, etc. Include costs even if they are in kind (i.e., volunteers,

books, materials, etc.)Try to think of everything that will be needed

Direct CostsExpenses directly attributed to the

project/program:Personnel (salaries/wages, benefits)Contract servicesTravel and per diem expensesFacilitiesEquipment, supplies/materials

Check with your organization to find out about benefits, per diem, etc.

Check with funder to find out what is covered

Indirect CostsCosts related to the infrastructure necessary to

support the program/project, but are difficult to separate out (also called overhead costs).Lights, heat, rent, depreciation of equipment, etc.Usually calculated as a percentage of the direct costs

(check with your organization to see what they suggest).

Check with funder to find out what is covered.

Project TeamsChoose a simple project that you want to be grant

funded1-3 years in lengthConcrete, attainable objectives

Examples: 1 week diabetes camp for youth, single parent monthly support group, fall prevention training for nursing home staff, etc.

Brainstorm all the costs involved in the projectList out any and all ideas

Step 2: Arrange Budget ItemsOrganize your brainstorm ideas into specific

categories (i.e., salaries, contracted services, equipment, marketing, printing, travel, etc.)

Organize by category, by time, and by sourceCategory: personnel, other direct expenses, indirect

costsTime: how much you plan to spend each yearSource: where will funding come from (self, funder,

other sources)

Project TeamsOrganize your brainstorm ideas into categories, by

time, and by source. Use general categories (personnel, other expenses,

indirect expenses) and then break down further.If your project spans more than one year, estimate

costs per year.What other sources of revenue do you foresee (in

kind, other grant awards, other possible sources of funds)?

Step 3: Format DataBudget formats vary depending on what each

funder wants to know.Use the format suggested/required by the funder.

Budget ConsiderationsResearch costs to keep the numbers as realistic as

possible.Research the funder to know total dollars available,

minimum/maximum awards, average award, whether they have funded what you are asking for.

Consider asking for no more than the average grant amount.

Continually review, revise, and refine the budget.Asking for a specific amount ($18,750) instead of a

round number ($20,000) makes your request look more authentic and less impulsive.

Project TeamsTransfer your data into the Endowment for Health

spreadsheet.Look at examples to see what is included and how it

is listed.

Budget NarrativeThe budget narrative (justification) expands on line

items, explaining how you arrived at dollar amounts and giving enough detail to tie the costs to the project’s activities and goals already described.

As with the entire proposal, budget narratives should be clear and concise.

Look at the Endowment for Health example to see how this funder expects the budget justification to be written.

Red Flags in the Budget NarrativeThree additional considerations will help the

narrative avoid raising any unnecessary red flags.Make sure the narrative matches the line-items

exactly (do your addition correctly). Make sure the total amount is commensurate with

the outcomes of the project/program (the amount should make sense in terms of what you propose to do).

Use fair and reasonable costs (do your homework).

Final Budget ChecklistTells the same story as the proposal narrative.Sufficient to perform all the tasks in the proposal

narrative.Contains no unexplained amounts or a

miscellaneous category.Includes only those costs to be incurred during the

grant period.Follows funder guidelines.

Part II: Managing the Grant Budget

Grant Award NegotiationWhen the award is substantially the same as

specified in the original proposal, no negotiation is needed.

A funding agency may decide to support a project at a different level from that requested (usually at a reduced level).

Negotiation process:Notification from funderInvolvement of institution

Purpose of Grant ManagementTo define what’s expected and approvedTo provide budgetary controlsTo guide staff as they execute the programTo reflect upon your performance

Poor Grant ManagementFailure to effectively plan and monitor the costs of

a project can result in;Funds reduced or withdrawn at fiscal boundariesDisallowed expensesProject terminationHarm to your reputation

Steps to Effective Grant ManagementStep 1: Develop a realistic and defensible plan

Step 2: Pay attention and carefully monitor progress

Step 3: Manage the unexpected

Step 1: Develop a Realistic and Defensible Plan

Good budget planning is a key part of budget management.

Know your grant budget.Read the fine print to make sure you know what the

funder is requiring of you. You cannot change your mind after the grant is

approved.Grant dollars must support the program and must be

spent for the services and commodities specified in the grant application.

Step 2: Pay Attention / Carefully Monitor ProgressRecordingDevelop an effective, efficient system to:

Track and document expenditures Ensure adherence to funder guidelinesProvide a clear audit trailAssure budget modifications are properly approvedProvide a feedback loop to program personnel

Pay Attention / Carefully Monitor ProgressReportingDevelop a system to deliver timely, accurate

information in easily interpreted formats.Reports should contain three easily identifiable

numbers: list of expenditures to date in identified accounts, projected costs, remaining balance in each account.

Reports should show whether the grant will be over or under spent.

Keep the funder informed if there are potential problems.

Step 3: Manage the Unexpected

DOLook for early problems and develop possible

solutions.Alert your institution.Ask for help from your organization and from the

funder

Manage the UnexpectedDO NOTRob Peter to pay Paul (cost transfers). Ignore the problems and hope they’ll go away.Hurry up and spend money at the end of a contract.Assume that your organization will cover cost

overruns.Lie!

SummaryGood ideas require good money – that’s why we

write grants!Becoming proficient at developing and managing

grant budgets will ensure that your good ideas will continue being funded.

ResourcesHall, M. & Howlett, S. (2003). Getting Funded: The

Complete Guide to Writing Grant Proposals, 4th Edition. Portland, OR; Portland State University Continuing Education Press.

www.grants.govThe Grantstmanship Center (www.tgci.com)The NH Center for Nonprofits (

www.nhnonprofits.org)