Storytelling budgets

Who loves budgeting? 

Almost no one. 

Why?

 Maybe it’s because numbers and spreadsheets aren’t the sexiest way to inspire impact investors, donors, or foundations to make an investment in your dream. However, there is a compelling story in every budget so let’s explore how that happens. Putting your toe into the budget waters just might make it easier for you to take a deeper dive and understand the big ways in which a budget says a lot about your organization and its ability to make our world a better place.

As a former proposal reviewer and funding decision-maker, I will make the case for putting your budget in the limelight so that your proposal is as clear as a high mountain lake to the review team members that hold your future in their hands.

For the moment, let’s review just one very basic approach to creating a project budget. The basics in project budgeting can be applied, in part, to the annual organizational budget process. The organizational budgeting process, however, is much more comprehensive in nature and deserves its own time and place to explore (in another blog post). We’ll get to the actual form of the project budget a bit later. For now, let’s review the human process of bringing out the numbers from a narrative.

In addition to gathering people, ideas, resources and needs, you’ll need a robust budget form that answers the question ‘how did you get to those numbers?’

Let’s start with SMART budget constraints. Each expense line item – just like any written goal or objective – must be Specific, Measurable, Achievable, Realistic and Time-bound. Budget notes or a budget narrative is where you can expand on the budget form to make your story very clear.

When do you want your project to begin?

In-depth research of foundation and government agency funding opportunities lead to a fundraising calendar that in turn informs the start and end date of many time-limited projects. Use the research to understand how long it could take to get adequate funding in the door for your proposed project. If the project begins before funding arrives, the grant award may fall out of compliance with the funders guidelines.

After completing the basic elements of your planning below, you’ll want to circle back on the timing of your project, and plan to shift if needed.

What will your project attempt to achieve? What will you do? What does the project mean for the people you’ll serve?

Examples of what include:

·      Outdoor or indoor gathering of 350 people (workshop, celebration, community festival, symposium, etc.) to inspire installation of solar panels for 25 low-income homes

·      Removal of three major invasive plant species from one-acre of riparian land along two stream miles

·      Replacement of a roof and 1,500 square-foot deck for a local WWII Veteran

‘What’ in a sexy title grabs our attention. Titles create visuals in our minds and cause people to stop and read, or move on without a second thought. Create a draft project title that causes readers who know nothing about your organization to stop, read and be inspired!

After going through all of the discussion elements below, circle back to the project title and period to make sure both of these budget sections are SMART.

How will you deliver, implement or make possible your project? Below are a few examples:

Gathering Space (Venue)

·      Will you hold events for people to gather?

·      If yes, where (city, state and exact venue) will those events take place?

·      Will the venue be donated (see in-kind below) or will it cost money by the hour or day?

·      Are there extra costs for projector and screen? Microphone and podium? Electrical and big screen projection? Cables and internet? Chairs, tables, table cloths, water, refreshments, full meals?

·      How many restrooms are there? Great enough capacity to meet your attendee needs? Do you need to rent additional porta-potties?

·      Does your organization meet the insurance requirements to occupy the venue? If not, what does the insurance premium cost?

·      Will stipends be provided to speakers? If yes, how many people and at what amount per speaker?

·      Can you meet all the terms of agreement to occupy the venue?

Venue rental for outdoor or indoor events are associated with numerous costs and constraints so be diligent in your information gathering to make sure the venue is appropriate for both your organization and the people you serve during the event

Travel

·      Will the project implementation team need to travel to organize, set-up and/or manage the event on-site? How many miles per trip per person; and what is the anticipated federal mileage reimbursement rate?

·      Does your employee manual provide clear policy and procedures for travel and mileage reimbursements? How will the reimbursement policy inform your budget costs?

If no employee manual is available, then ask the Board of Directors to create a policy specifically for employee travel and mileage reimbursement

Supplies/Materials

·      What kind of tools, resources, supplies and materials will you need to carry out each project activity? Be very specific about the exact items you’ll need, for example:

Printed/mailed brochures, copied surveys, printed programs, name tags

Food and refreshments

Volunteer awards, framed photos, plaques

Thank you cards and postage to steward your new or existing relationships

 In-kind

·      Are there people (Board, non-staff volunteers or NGO partners) who will contribute hours to your project?

Use Independent Sector as your source for the value of each volunteer hour

·      Will venue be donated? If yes, gather details in writing to substantiate the contribution, which is a no-cost invoice that documents all items, units, and unit costs. This no-cost invoice should be shared with accounting and your CPA, and will become a very important part of the budget and story of partnership

·      Will food or refreshments be donated? If yes, get the no-cost invoice!

Who

·      Who will spend time on the project? Be specific! Name each title of every individual who works on the project

·      How many hours over the course of the project will each person work on the project?

·      Why will each person be part of the project implementation? Oversight? Execution and project management? Financial management?

·      What is the fully loaded hourly compensation rate for each person? (salary/wages, taxes and all benefits)

 These are the basic elements of a project budget. Many other expenses can and should be included in your budget story. Be specific about when, what, how and who. Tell the whole story on one page that mirrors the narrative of your proposal.

 Overhead!

Very Important Note: please take the time and effort to understand the distinction between direct and indirect expenses. Direct expenses (for projects) are those listed above, as well as others that can only be used in the course of project implementation.

Overhead, however, is designed to cover costs of the entire organization and its daily operations that can’t be applied to any single project. Indirect costs occur even without specific projects. Examples include rent, telephone, website, online data management, maintenance and repairs, general liability insurance, errors and omissions insurance, CPA and accounting services, fundraising staff hours, and other staff whose work supports the entire organization on a daily basis.

Generally speaking:

·      Projects = Direct Expenses

·      Operations = Indirect Expenses

Most foundations are slowly approving proposals that include up to 18% in ‘General’ ‘Overhead’ ‘Admin’ or some other categorical term to describe all of the indirect costs that any business incurs to do its work.

Caveat – some foundations, and most government agencies, will accept only up to 10%, which is a far cry from a typical overhead rate. A completely separate conversation is needed to explain how organizations allocate executive and administrative wages, taxes and benefits, which has a big impact on an organization’s overhead rate. Regardless, the best place to get your organization’s overhead rate is from accounting. If you are a one-person or very small shop, ask your CPA or the person or company that provides your accounting services for the organizations actual overhead or administrative rate.

The Spreadsheet Story

So, how does the story emerge from units, costs and line items? As a grant review team member, I should be able to learn the following things about your proposed project from the budget form. Grant reviewers can expect to read a narrative that includes descriptions of the budgeted items. The story and budget must be mirrored reflections of each other!

·      The number of staff and hours per person at their respective hourly rates

·      Travel requirements – local, regional, national or international; name the staff positions that will travel, and the per diem costs to support the travel

·      Project supplies and materials identified by description, unit, unit cost and total

·      Venue costs by hour, day or specified period, and venue name and location

·      Promotional materials and item units tell grant reviewers what kind of outreach will be done, how many people might be approached, and how many individuals can expect to be engaged during the project period

·      Community partnerships that are likely to create a more diverse project or serve a diverse audience. Secure community letters of support and include with your proposal where allowed. Letters from Board members do not suffice.

·      Board member contributions of time and effort using the Independent Sector hourly rates for your region.

Where to begin budgeting? I’m happy to share a project budget form to get you started during your free consultation.