There is so much that can be said about budget development in grant writing that it cannot be placed in one tip sheet. One area of particular importance is the quality and accuracy of the budget numbers.
I often tell nonprofits that the “story is in the numbers”, meaning that much can be obtained about the health, direction and potential growth of an organization by going beyond the warm “feel good” narratives we read in donor marketing materials and focusing directly on the numbers we find in quantitative outcome measurement tools and the fiscal balance sheet. It is more than a matter of money in, money out or client in and client out. The numbers give a snapshot view of the scope and depth of services provided per client. They also give insight into the viability of certain programs, unmet demand for services and a sense of how well the organization is positioned for the future.
When writing a request for funding, I would encourage grant seekers to keep the following tips in mind:
Avoid artificially low (or high) numbers: In some instances, a nonprofit seeking funding will undercut its actual program costs with the hope of appealing to a prospective funder. While prospective funders do want the reassurance of knowing that an organization is using monies efficiently, it does not expect an organization to operate at artificially low prices.
In one particular instance, I recall a proposal where an organization asserted that they would run a new program headed by an ACSW-certificate social worker with wages that were far below the market average. What this demonstrates is that the organization may not have done its due diligence to uncover the “true cost” of implementing a program.
If funding is awarded and one cannot find an appropriately skilled professional to do the intended job at the price given, then the organization is left to explain gaps in service, etc. Or, if the organization is awarded a grant based on the numbers presented in a proposal and find that the “true cost” of a program far exceeds what was budgeted, then the nonprofit is in a tenuous position of struggling to deliver what they have promised to their funders. This could potentially have a negative impact on gaining future support.
Conversely, the same can be said of unusually high cost estimates. No funder wants to invest in something above its proven value. Bottom line: it’s important to be in touch with the market averages. If for some reason a proposed program falls outside of that average, then be prepared to make the case why this difference in cost is justified.
Factor in technology: Technology and data tracking are just a common part of everyday life, yet many proposals do not factor in the cost of software/hardware, training, data storing and security as it relates to the implementation and measurement of a given program. By not factoring the use of technology and its role, many grant seekers are missing a prime opportunity to expand their funding potential.
Make a case for the future: Demonstrate how the nonprofit will perpetuate its program after the initial funding has ended. Identify prospective funders that the nonprofit is currently courting for future investments. This offers funders some security that the requesting organization is not just taking a shot in the dark, but has given serious consideration as to the growth and direction of the program for future years.
Check before you submit: Get more than one pair of eyes to review the narrative and budget portions of the proposal before submission. Ideally, have someone review the material that has not played a significant role in writing the proposal. Sometimes a “fresh pair of eyes” can spot inconsistencies more readily.