The University of Arizona Foundation - GIFT Center : Budgeting for Private Grantseeking

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Budgeting for Private Grantseeking

Before any fundraising takes place, spend appropriate time determining the legitimate costs of a project or program. Budget planning is an integral part of your overall program planning. Your proposal budget may very well be the most important component of your proposal package. Anecdotal information from grantmakers emphasizes time and again that program budgets are often the first proposal item that is reviewed. Consider the budget as a financial expression of the proposal narrative, with figures that reflect proposed activities and include an estimate of every real cost associated with your program.

Budget Planning
Indirect Costs
The Budget Narrative or Justification
Budget Template and Planning Tools
Basic Annual Project/Program Budget Format
Three-Column Annual Project/Program Budget Format
Helpful Budget Links

Budget Planning

Keep in mind as well that, unlike many grant proposals, the budget included in a private grant proposal is typically a projection of your estimated costs and not necessarily a fiscally binding document. Do plan as specifically as possible; budget numbers that are too rounded do not demonstrate accurate planning. Though it is important to plan your budget as carefully as possible, subtle changes do sometimes occur with your actual expenditures during program implementation. Know that most grantmakers welcome open communication when budget or other program adjustments occur throughout the grant period.

Work closely with your unit's business office; they will support your planning, particularly if done in advance, and ensure that your budget is in line with UA fiscal policies.

It is also important to remember that the program budget included in your proposal is an annual picture of the entire program and not just the funds you are requesting. Grantmakers expect and appreciate a comprehensive overview of your work, particularly dollars that demonstrate other committed resources and funders. Your proposal and budget are greatly strengthened if you are able to demonstrate that diverse resources are committed to your program, including UA resources and other funding sources. Other funding sources can include foundations, individual donors, and sometimes government resources.

This demonstration of diverse support committed to a project or program can sometimes be confused with UA cost sharing. An important distinction is that, most often, charitable grant budgets are illustrating program stability by merely showing all resources that are committed to the proposed program ("all funds budget"). A distinction between this budget function and cost sharing is that the charitable grants budget is an informal financial illustration that is not considered a binding document committing funds in a manner that requires future reporting that often involve University approvals and financial management systems. However, do use caution when you include other funding sources in your charitable grants budgets and rely on the expertise and financial policies of your business office.

Within the budget and in your narrative, it is important to clarify which portion of the expenses you are requesting in your proposal. For example, your proposal might request funds for the printing and publications portion of a public awareness campaign while demonstrating that associated staff time is committed by the University or an additional existing/future funding source. A helpful tool is the three-column budget, which demonstrates your expenses and the income sources that are funding those expenses. You will find a template for this budget tool later in this section.

Indirect Costs

Also referred to as facilities and administration (sometimes known as F&A) costs, indirect costs are related to institutional infrastructure, both physical and administrative (space, equipment, utilities, administrative support, custodial services, security, library services, information systems, shared research facilities, postage and printing, communications systems, etc.). When developing a grant budget for a sponsored project proposal, indirect costs are generally not itemized and are instead calculated as a pre-negotiated institutionally based percentage of all or part of the direct project costs. Infrastructure costs are handled differently in charitable grant proposals. There is no comprehensive percentage rate to cover them; they are instead itemized as allowed and appropriate in each request.

Additionally, budget items that typically can not be requested from government granting agencies, and other similar entities, may be justifiable and allowable direct project costs with charitable granting foundations (e.g., mailing costs, administrative staff salaries, etc.). Commonly accepted budget line items are included in the budget templates later in this section. Many of these are considered part of the indirect cost rate in sponsored proposals, yet are common and generally well-received charitable grant budgeting line items; however, their use is always dependent on the specific corporate or foundation grant guidelines. Though not always the case, including these line items is a viable option for recovering UA indirect cost, or conversely another way of demonstrating UA support of a program.

Though most private grant proposals may not be subjected to UA's indirect costs rates, there is a 6% University Development Fund fee imposed on charitable grants greater than $5,000 given to the UA or UA Foundation. Learn more about the University Development Fund in the UA gift policy, item 8.33. Our office will work with you in determining the appropriate strategy for incorporating the gift fee into your budget planning.

The Budget Narrative or Justification

There is sometimes an opportunity to include a written description of your budget, if the grantmaker's guidelines request and/or permit it. This financial narrative can help describe major or potentially confusing line items in the budget, explain how costs were estimated, describe any UA particulars associated with costs, and explain why the costs are reasonable. When crafting a budget narrative, organize your information by the title and in the order of each budget line item.

For example:

Fabulous Project Annual Budget
FY 2009-2010

	Expenses	Amount
	Salaries and wages	31,200
	Printing and copying	3,000

Fabulous Project Budget Narrative
FY 2009-2010

	Salaries and wages ($31,200) — Salary for 3 community educators at $20/hour x 10 hours/week x 52 weeks in the project year.
	Printing and copying ($3,000) — Design ($1,200) and color printing for 20 educational posters ($40 per poster=$800) displayed at community health clinics. Remaining $1,000 for handouts distributed at training sessions.

Budget Templates and Planning Tools

Grantmakers will often include a preferred budget format in their guidelines, the budget format you absolutely use when available. For planning purposes, however, here are two helpful budget formats that can also be used in cases where the guidelines do not offer a budget form. The first is a very simple layout that includes the most commonly used charitable grant budgeting line items. The second, three-column budget format, is an excellent tool for demonstrating diverse funding sources and other resources committed to the project. If permitted by the funder's guidelines and format, footnotes can be used to provide further information about specific line items, such as how personnel expenses break down, where pending grant applications were submitted, and what falls under "other," if applicable.

Basic Annual Project/Program Budget Format

Program Budget Funding Year _____
PROJECTED SUPPORT/REVENUE
Source	Amount
Government Contracts and Grants
Organizational Funds (i.e., UA salary contribution)
Foundations
Corporations
Individual Contributions
Fundraising Events
Membership Income
Investment Income
Endowed Income
Earned Income
Other (Specify)

Total Income	$

PROJECTED EXPENSES
Item	Amount
Salaries and Wages
ERE’s
Consultants and Professional Fees
Employee Education and Training
Travel/Transportation
Equipment
Supplies
Printing and Copying
Telephone and Fax
Postage and Delivery
Rent and Utilities
Insurance
Depreciation
Fundraising and Development
Other (Specify)

Total Expenses	$
Difference (Income less Expenses)

Please find a similar Word version of this budget template here for your planning purposes.

Three-Column Annual Project/Program Budget Format

Again, the three-column budget format is particularly useful for demonstrating diverse funding sources that are committed to your program. When space permits, use column B to delineate the specific source of funding—whether University support, private foundation(s) support, individual donations, and any other sources of funding. It is also advantageous if projected funding sources are included in column C—such as specific future grantseeking or other fundraising activities.

Program Budget Funding Year _____
Item	Amount requested from grantmaker (Column A)	Funding Secured (Column B)	Amount Remaining to be raised Column C)	Total Budget Add Columns (A+B+C)
Personnel/Salaries


Subtotal: Personnel
Benefits (______% of personnel)
Subtotal: Personnel

Program Expenses
Consultants (list title and hours)
Office Supplies
Printing/duplicating
Mailing/postage/delivery
Program materials/other supplies
Utilities
Telephone
Rent
Local travel
Insurance
Other

Subtotal: Program Expenses
Total Expenses (Personnel + Program Expenses)

Helpful Budget Links

The Foundation Center — Proposal Budget Basics, a helpful tutorial for budget planning.