One part of this chapter that I didn’t think too much about before reading this is organization. I always figured that that was self explanatory when it comes to business ordeals such as this one, but what I wasn’t ready for was the idea that there isn’t really anybody to help you once you get the grant. Granted there will be other people in the organization likely to be able to aid you, but the way this chapter makes it seem is that there are an overwhelming amount of spinning plates that need to be accounted for. The need of a spreadsheet isn’t something I thought I would be writing down as important about budgeting, but it seems like a necessity.
Calculating revenue and expenses in order to create a budget is something that I think I will struggle with. I remember for our group we were struggling at the beginning to come up with a dollar amount to ask for, so I am curious to see how this section where we need to do a lot of number work plays out.
I was also surprised to come across as section all in bold about how the budget information needs to be recorded. It doesn’t say much about this part except that it should be easy to digest and understand, which brings up a lot of questions for me. I feel like the written out explanation of the final budget would have been helpful to see, as it makes me question what written aspect of the grant will follow this section.
I found the do’s and dont’s list to be really helpful in this section. Specificity is really important in this section, as it is will all of them, but this section it is heavily important as you are actively dealing with money. They say in here a few times to not include anything in your budget that wasn’t said in the grant which hammers home the importance of being specific in the grant in the first place, otherwise you will not be calculating the right amount of money you’ll need to budget.
Takeaway 1: General operating support budget versus program/project budget. You could think of the GOS as the umbrella of all the funds the nonprofit will either make or need for the fiscal year (or grant period). The GOS must reflect the goals, objs, and mission of the nonprofit as a whole. The PP budget is separate from GOS and is more narrowly focused on one specific projects funding needs and expected profit (if applicable). If a nonprofit has several projects, each one likely has their own PP budget.
Takeaway 2: Reviewing the guidelines set by funders. Althought it may be repetitive to hear by now because of how often WG refers to guidelines, but following them can set a nonprofit in a better position than others. Not following them can lead to the entire application being thrown away. When it comes to creating the document, there’s multiple factors like budget tools, budget narrative, details of the budget, and the organization of it that all must be confirmed by the funders guidelines.
Takeaway 3: The numbers have to correlate with the story. On one level, doing so engages the funder more because the focus is streamlined in both documents. On the other level, it demonstrates to the funder that the sum being requested will be used properly and isn’t an inflated number. Lastly, reviewing the written portion after the budgets creation is also helpful to confirm if there’s missing numbers or holes in the budgets feasibility.
Takeaway 4: There are three kinds of costs to be considered in compiling the budget. There is the direct costs, which are expenses that are static/specifc and can be itemized in the budget (related to the general operation of the nonprofit as a whole). Indirect costs are amounts that may be shared across the organization or various programs, usually determined by a cost rate. Lastly, in-kind costs are those goods, services, or volunteers donated to the organization (usually included on expense and revenue budgets). Although it seems simple, this section of the chapter had me slightly confused in terms of the calculation of each (especially indirect). Also, if the direct and indirect costs ever touch edges or overlap.
Something that I never considered before was determining specifically how much “indirect” funding an organization would apply for. However, having that as a guideline for many foundations regarding funding makes sense, as that sort of conveys how willing these foundations are to take risks and how much trust they put into organizations into spending the money properly. Part of this aspect is the fact that the organization needs to make clear that they have the remaining majority of the funding allocated properly, preferably through clearly formatted forms of presentation. The money should also be consistent with the budget narrative, otherwise, it would appear that the use of the granted money is not going to be used effectively. It is crucial that effort is put into considering all of the expenses that a program will bear and how much it will be, as budget proposals are almost always based on guesses of good faith. The budget proposal should be based on numbers in terms of the bulk, which can be stressful enough for granting foundations who have to make tough decisions. Therefore, the budget narrative must be concise and not overwhelming nor vague, clarifying potential questions that may arise from looking at all the numbers alone.
The four big takeaways from this chapter are as follows: Review, Research, and Organize; Develop the Budget; Review, Update, and Review Again; and lastly, Develop the Budget Narratives.
1. Review, Research, and Organize: this is effectively the process of thoroughly reviewing the grant guidelines and requirements, research the costs associated with the proposed project or program, and organizing all relevant information and documentation.
2. Develop the Budget: this is the creation of a detailed budget that aligns with the project goals and includes all necessary expenses, such as personnel costs, equipment, supplies, travel, and indirect costs. Ensure that the budget is accurate, realistic, and adheres to the funder’s guidelines.
3. Review, Update, and Review Again: this is the process of carefully reviewing the budget for accuracy, completeness, and compliance with the funder’s requirements. Then, updating the budget as needed based on feedback or changes in project scope. This can have consist of multiple reviews to ensure the budget is error-free and well-justified.
4. Develop the Budget Narratives: this is the preparation of a clear and concise budget narrative that explains and justifies each line item in the budget. The narrative should demonstrate how the requested funds will be used to achieve the project’s objectives and align with the overall program goals.
Conclusively, these aspects are crucial because a well-prepared budget demonstrates the nonprofit’s financial planning, accountability, and ability to manage grant funds effectively. It also helps the funder understand how the requested funds will be utilized and ensures that the proposed project is feasible and sustainable. And lastly, a comprehensive budget and narrative increase the chances of securing grant funding and establishing trust with the funder.
1. Make sure to check all boxes. It is important to think about costs that may arise from every single aspect of a project. This is not a piece that can be done in one sitting, and it is very easy to miss parts. It is important to double check your work, and make sure that every part of a project is accounted for.
2. Checking guidelines set by funders is so important before submitting a finished budget, as you want to make sure nothing in the budget goes against guidelines. This can make or break a proposal, as even one little thing being missed here can make a funder disregard your application.
3. Double checking calculations is essential, as it is so easy to get numbers mixed up when working with a budget. Having a few sets of eyes look at something can be very helpful, and double checking math seems like a given, but with so many items to worry about, it may not be. Taking the time to double check all math is very important, as an inconsistency does not make an organization look good.
4. Itemizing and separating is a good idea. It is not a good idea to lump items together. Instead, specific items need to be listed out, such as employee salaries and small expenses. It makes sense to lump them together, but when looking through the lense of a funder, an application with more specific items is going to be more appealing.
I think overall, having a budget is a super important timeline to have for a project to get the money moving effectively in a sense. The money needs to be spent but needs to be spent appropriately and none of it can go to waste. However, finding/figuring out a budget is a little more difficult because some research is required depending on what the project is as each project is going to require different things. One thing that I thought was super important from our talk with Arthur Anderson was that you have to be creative with the money. Budgeting is such a common sense idea that it can easily forgotten, so keeping records is key.
1. There are different kinds of budgets that grant funders require. There is a big difference in how a general operating budget and a program budget are created and represented. I assume we will be creating a program budget, and I wonder if looking on their (our nonprofit’s) tax forms will help give us an idea about how employees are paid and other expenses estimated.
2. The last step in the process of budget creation is the “budget narrative.” I have never heard this term before and did not know how a story could be told through the expenses and revenue of a budget. However, the chapter makes a compelling point of how a narrative clarifies how the money is spent and shows a lot of transparency from the organization creating it. I think this is a great step because it humanizes how the money is being spent and it makes more logical sense than just a spread sheet by itself.
3. Volunteer contributions are put into budgets??? Clearly I have never made a budget professionally because this chapter emphasized that volunteer work is critical to include in the expenditures and revenues of the budget! I did not know that volunteer work was calculated. This will be very important for the creation of our own program budgets.
4. Finally, this chapter beat you over the head with the fact that you need to check, revise, recheck, revise, and triple check the budget. People are serious about where and how their money is spent in grants, so a good budget is one that shows a lot of care and scrutiny.
I find it interesting that you are supposed to develop the budget narrative after researching, creating, and reviewing the budget. In my mind, it would be more efficient to develop the budget narrative along with the process and edit it as necessary. However, I assume it may be confusing to balance updating the physical budget and the narrative at the same time. Also, one may forget to update the narrative after budget edits have been made.
I found the bullet about considering “items you should not include in the budget” on Stage 1 interesting. Specifically, I’m curious as to what types of items should not be included, and if those items will still be purchased through cushion funds, or if this is meant to mean that those items will not be included in the budget because they will not be bought. If the later is the case, then why would one even consider them in the first place?
Moving forward in the chapter, readers learn that there are direct and indirect costs when budgeting. In response to my previous bullet point, I imagine that indirect costs would not be factored into the budget individually but would be factored into indirect costs. How does one reference and justify indirect costs in the budget narrative?
The final thing that stood out to me was a point made under the “Don’t” section on page 87: “Lump all revenues and expenses together; rather, itemize for clarity.” This stood out to me because it led me to wonder where the balance lies. For example, if I am trying to fund an arts program and need art supplies, would I request $4k for “art supplies,” or would I request $2k for paper, pencils, and paint for one project and $2k worth of photography equipment for another project?
Having accurate estimations of your revenues and expenses is important to set you up for success and show funders that you know what to do with mass amounts of money. I can imagine it’s a bit difficult to estimate volunteer effort or donations. What if you expect lots of volunteers and donations that fiscal year, but come up short? That can put a big dent in current and future planning for your organization. Direct costs such as employee salaries are key to factor into your budget. These costs are the foundation of your organization or program, and without it being sustained, things could easily fall apart. You must keep in mind rent if you need a physical space for you and your staff and any supplies, especially with rising prices. Reviewing your budget and double checking everything is crucial, especially considering donations and grant awards. You have to be able to show that you can manage money properly and be a trusted organization within your community.
9 thoughts on “JOURNAL # 15”
One part of this chapter that I didn’t think too much about before reading this is organization. I always figured that that was self explanatory when it comes to business ordeals such as this one, but what I wasn’t ready for was the idea that there isn’t really anybody to help you once you get the grant. Granted there will be other people in the organization likely to be able to aid you, but the way this chapter makes it seem is that there are an overwhelming amount of spinning plates that need to be accounted for. The need of a spreadsheet isn’t something I thought I would be writing down as important about budgeting, but it seems like a necessity.
Calculating revenue and expenses in order to create a budget is something that I think I will struggle with. I remember for our group we were struggling at the beginning to come up with a dollar amount to ask for, so I am curious to see how this section where we need to do a lot of number work plays out.
I was also surprised to come across as section all in bold about how the budget information needs to be recorded. It doesn’t say much about this part except that it should be easy to digest and understand, which brings up a lot of questions for me. I feel like the written out explanation of the final budget would have been helpful to see, as it makes me question what written aspect of the grant will follow this section.
I found the do’s and dont’s list to be really helpful in this section. Specificity is really important in this section, as it is will all of them, but this section it is heavily important as you are actively dealing with money. They say in here a few times to not include anything in your budget that wasn’t said in the grant which hammers home the importance of being specific in the grant in the first place, otherwise you will not be calculating the right amount of money you’ll need to budget.
Takeaway 1: General operating support budget versus program/project budget. You could think of the GOS as the umbrella of all the funds the nonprofit will either make or need for the fiscal year (or grant period). The GOS must reflect the goals, objs, and mission of the nonprofit as a whole. The PP budget is separate from GOS and is more narrowly focused on one specific projects funding needs and expected profit (if applicable). If a nonprofit has several projects, each one likely has their own PP budget.
Takeaway 2: Reviewing the guidelines set by funders. Althought it may be repetitive to hear by now because of how often WG refers to guidelines, but following them can set a nonprofit in a better position than others. Not following them can lead to the entire application being thrown away. When it comes to creating the document, there’s multiple factors like budget tools, budget narrative, details of the budget, and the organization of it that all must be confirmed by the funders guidelines.
Takeaway 3: The numbers have to correlate with the story. On one level, doing so engages the funder more because the focus is streamlined in both documents. On the other level, it demonstrates to the funder that the sum being requested will be used properly and isn’t an inflated number. Lastly, reviewing the written portion after the budgets creation is also helpful to confirm if there’s missing numbers or holes in the budgets feasibility.
Takeaway 4: There are three kinds of costs to be considered in compiling the budget. There is the direct costs, which are expenses that are static/specifc and can be itemized in the budget (related to the general operation of the nonprofit as a whole). Indirect costs are amounts that may be shared across the organization or various programs, usually determined by a cost rate. Lastly, in-kind costs are those goods, services, or volunteers donated to the organization (usually included on expense and revenue budgets). Although it seems simple, this section of the chapter had me slightly confused in terms of the calculation of each (especially indirect). Also, if the direct and indirect costs ever touch edges or overlap.
Something that I never considered before was determining specifically how much “indirect” funding an organization would apply for. However, having that as a guideline for many foundations regarding funding makes sense, as that sort of conveys how willing these foundations are to take risks and how much trust they put into organizations into spending the money properly. Part of this aspect is the fact that the organization needs to make clear that they have the remaining majority of the funding allocated properly, preferably through clearly formatted forms of presentation. The money should also be consistent with the budget narrative, otherwise, it would appear that the use of the granted money is not going to be used effectively. It is crucial that effort is put into considering all of the expenses that a program will bear and how much it will be, as budget proposals are almost always based on guesses of good faith. The budget proposal should be based on numbers in terms of the bulk, which can be stressful enough for granting foundations who have to make tough decisions. Therefore, the budget narrative must be concise and not overwhelming nor vague, clarifying potential questions that may arise from looking at all the numbers alone.
The four big takeaways from this chapter are as follows: Review, Research, and Organize; Develop the Budget; Review, Update, and Review Again; and lastly, Develop the Budget Narratives.
1. Review, Research, and Organize: this is effectively the process of thoroughly reviewing the grant guidelines and requirements, research the costs associated with the proposed project or program, and organizing all relevant information and documentation.
2. Develop the Budget: this is the creation of a detailed budget that aligns with the project goals and includes all necessary expenses, such as personnel costs, equipment, supplies, travel, and indirect costs. Ensure that the budget is accurate, realistic, and adheres to the funder’s guidelines.
3. Review, Update, and Review Again: this is the process of carefully reviewing the budget for accuracy, completeness, and compliance with the funder’s requirements. Then, updating the budget as needed based on feedback or changes in project scope. This can have consist of multiple reviews to ensure the budget is error-free and well-justified.
4. Develop the Budget Narratives: this is the preparation of a clear and concise budget narrative that explains and justifies each line item in the budget. The narrative should demonstrate how the requested funds will be used to achieve the project’s objectives and align with the overall program goals.
Conclusively, these aspects are crucial because a well-prepared budget demonstrates the nonprofit’s financial planning, accountability, and ability to manage grant funds effectively. It also helps the funder understand how the requested funds will be utilized and ensures that the proposed project is feasible and sustainable. And lastly, a comprehensive budget and narrative increase the chances of securing grant funding and establishing trust with the funder.
1. Make sure to check all boxes. It is important to think about costs that may arise from every single aspect of a project. This is not a piece that can be done in one sitting, and it is very easy to miss parts. It is important to double check your work, and make sure that every part of a project is accounted for.
2. Checking guidelines set by funders is so important before submitting a finished budget, as you want to make sure nothing in the budget goes against guidelines. This can make or break a proposal, as even one little thing being missed here can make a funder disregard your application.
3. Double checking calculations is essential, as it is so easy to get numbers mixed up when working with a budget. Having a few sets of eyes look at something can be very helpful, and double checking math seems like a given, but with so many items to worry about, it may not be. Taking the time to double check all math is very important, as an inconsistency does not make an organization look good.
4. Itemizing and separating is a good idea. It is not a good idea to lump items together. Instead, specific items need to be listed out, such as employee salaries and small expenses. It makes sense to lump them together, but when looking through the lense of a funder, an application with more specific items is going to be more appealing.
I think overall, having a budget is a super important timeline to have for a project to get the money moving effectively in a sense. The money needs to be spent but needs to be spent appropriately and none of it can go to waste. However, finding/figuring out a budget is a little more difficult because some research is required depending on what the project is as each project is going to require different things. One thing that I thought was super important from our talk with Arthur Anderson was that you have to be creative with the money. Budgeting is such a common sense idea that it can easily forgotten, so keeping records is key.
1. There are different kinds of budgets that grant funders require. There is a big difference in how a general operating budget and a program budget are created and represented. I assume we will be creating a program budget, and I wonder if looking on their (our nonprofit’s) tax forms will help give us an idea about how employees are paid and other expenses estimated.
2. The last step in the process of budget creation is the “budget narrative.” I have never heard this term before and did not know how a story could be told through the expenses and revenue of a budget. However, the chapter makes a compelling point of how a narrative clarifies how the money is spent and shows a lot of transparency from the organization creating it. I think this is a great step because it humanizes how the money is being spent and it makes more logical sense than just a spread sheet by itself.
3. Volunteer contributions are put into budgets??? Clearly I have never made a budget professionally because this chapter emphasized that volunteer work is critical to include in the expenditures and revenues of the budget! I did not know that volunteer work was calculated. This will be very important for the creation of our own program budgets.
4. Finally, this chapter beat you over the head with the fact that you need to check, revise, recheck, revise, and triple check the budget. People are serious about where and how their money is spent in grants, so a good budget is one that shows a lot of care and scrutiny.
I find it interesting that you are supposed to develop the budget narrative after researching, creating, and reviewing the budget. In my mind, it would be more efficient to develop the budget narrative along with the process and edit it as necessary. However, I assume it may be confusing to balance updating the physical budget and the narrative at the same time. Also, one may forget to update the narrative after budget edits have been made.
I found the bullet about considering “items you should not include in the budget” on Stage 1 interesting. Specifically, I’m curious as to what types of items should not be included, and if those items will still be purchased through cushion funds, or if this is meant to mean that those items will not be included in the budget because they will not be bought. If the later is the case, then why would one even consider them in the first place?
Moving forward in the chapter, readers learn that there are direct and indirect costs when budgeting. In response to my previous bullet point, I imagine that indirect costs would not be factored into the budget individually but would be factored into indirect costs. How does one reference and justify indirect costs in the budget narrative?
The final thing that stood out to me was a point made under the “Don’t” section on page 87: “Lump all revenues and expenses together; rather, itemize for clarity.” This stood out to me because it led me to wonder where the balance lies. For example, if I am trying to fund an arts program and need art supplies, would I request $4k for “art supplies,” or would I request $2k for paper, pencils, and paint for one project and $2k worth of photography equipment for another project?
Having accurate estimations of your revenues and expenses is important to set you up for success and show funders that you know what to do with mass amounts of money. I can imagine it’s a bit difficult to estimate volunteer effort or donations. What if you expect lots of volunteers and donations that fiscal year, but come up short? That can put a big dent in current and future planning for your organization. Direct costs such as employee salaries are key to factor into your budget. These costs are the foundation of your organization or program, and without it being sustained, things could easily fall apart. You must keep in mind rent if you need a physical space for you and your staff and any supplies, especially with rising prices. Reviewing your budget and double checking everything is crucial, especially considering donations and grant awards. You have to be able to show that you can manage money properly and be a trusted organization within your community.