Step 4.6
Budget
A project budget is more than just a statement of proposed expenditures; it is a reflection of how thoroughly you have thought through your project.
The nature of your budget will depend on the requirements of the funder. However, in the current funding environment, you need to provide a high level of detail to demonstrate your organization's ability to manage money in an effective and responsible manner.
Ordinarily, a budget is divided into two broad categories: direct costs and indirect costs. Direct costs are those that can be identified with your specific proposal and include such items as personnel (salaries and benefits), equipment, services, supplies, travel, and consultants. Indirect costs refer to such items as office space, utilities, administrative services, custodial costs, and "overhead" expenses that are often taken for granted.
A typical budget contains the following categories:
Program Income
These are direct charges or fees to participants of the project. Program income must be kept in a restricted account and either returned to the granting agency or used to fund direct costs of items needed to expand the quality or quantity of services provided. With some public funding programs, it can also be carried over into the following fiscal year.
Direct costs
Personnel
Salaries and wages: Salaries and wages are defined as fixed payments at regular intervals to professional and clerical staff, and hourly-based payments to part-time and intermittent employees, for services performed. List each staff position with titles, monthly or weekly salary ranges, number of persons per position, number of months or weeks to be devoted to the project, percentage of time devoted to the project and total salaries per position.
Fringe benefits: This line item represents payments other than salaries and wages made to staff, or paid on their account, as in the form of a pension, vacation, insurance, etc. List fringe benefits for project staff, including FICA, unemployment and workers' compensation, and hospitalization. Include computation and rate details.
Travel
This line item represents payments for transportation, meals, and lodging of staff in accordance with the funder's policy. Check with the funding source for allowable rates for in-state travel. Check with the funding agency beforehand about out-of-state travel. Project the total local mileage of each staff person and also specify the purpose of such travel for each position listed. If out-of-state travel is an allowable expense, specify the purpose of such travel (e.g. program-related activities, training, conferences).
Consultants and contracts
This is a list of fees for all legal, accounting and professional services. Provide specific cost breakouts for each item listed.
Services, supplies, and materials
These items include office and program supplies such as paper, pens, typing ribbon, folders, postage, training materials, printing and reproduction, and legal fees. It is important to itemize all expenses.
Equipment purchase and rental
Indirect costs
Overhead and administration
Overhead or indirect costs are those additional costs which will be incurred by an organization that operates multiple programs as a result of taking on this new project. These costs are typically determined by charging a fixed percentage, such as 10 to 15 percent, of the total grant request, to cover such expenses as general and unit personnel and non-personnel costs. Some public and private funding sources may disallow these charges, so check with the funding source before including this category. These costs are not to duplicate any costs charged to the other cost line items in this section.
Facilities and utilities
This line item represents payments for building and space rent, utilities, janitorial service, general maintenance and repairs, necessary re-arrangements and alterations of facilities which do not materially increase the value or useful life of the facility, and other related costs necessary to provide adequate space. In some instances, this could be included under Overhead and administration.
A cost analysis study may have to be conducted to determine the amount of rent to be charged to the project if the project is housed within the organization's own facility. The most important thing to show is the amount of space cost per month by the number of project months to determine total cost or cost per square footage.
Utilities: The costs for electricity and gas are sometimes recorded separately from space costs. If no specific budget format is provided, you may opt to place these items in a separate budget category.
Telecommunications: Included in this line item category are costs associated with installation and monthly charges for telephone lines, computer phone lines, fax machines, cellular telephones, pagers, and the like.
Other Costs
Included in this budget category are such items that have not been captured in the preceding categories. This may include repair and maintenance charges for rental equipment, meeting costs, subscription dues, and insurance and bonding costs. Remember to provide specific cost breakouts for each item listed.
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