Art Grant How Do I Do a Project Budget for an Ongoing Project

Developing budgets for your project or for even your organization is ane of the most time-consuming tasks.

Often we recollect that a upkeep is a simple format attached to a projection proposal and you lot demand to fill it according to the activities and strategies proposed in the project. However, when you start opening upward a proposal backwards, you will realize that the upkeep is a critical component of the project.

Nosotros have decided to develop a projection proposal because we have understood and realized that at that place is a upkeep to support it. Nosotros also experience that the project needs can be fulfilled only if a budget is available for them. In fact, the budget determines the boundaries of the project. A budget is as well one of the final determining factors for a projection to receive its funding. If the upkeep is too high, the donor agency may either enquire you to reduce it or in some cases, as well reject the unabridged proposal if information technology is a highly competitive application process.

And so understanding and developing a proposal is an important exercise of your proposal development process. In other words, "it is a program explained in budgetary terms."

The reasons why we demand a budget is not just to program your project expenses but also convince your donors that you will deliver value to any money they requite to the project.

This is a very important question because a project proposal is a lengthy document comprising of several different components. There is an introduction part, a groundwork story, an explanation to justify the project, there are of grade goals, objectives and strategies. Simply what is that single page in the proposal to which every donor would plough and await into before giving a final decision?

What does the Donor Wait inside the Proposal Budget?

For every donor, it is important that at that place is 'transparency' in the process of developing and implementing a project. Transparency is nearly involving stakeholders, sharing ideas and building the projection with every real activity connected to your goal and objectives.

'Impact' is necessary because of which near proposals seek enormous information most the expected results. In fact, big donor agencies dedicated several pages of their proposal format documents on 'results assay' to identify and understand that every penny spent will generate some impact at the ground-level. Further, the monitoring and evaluation procedure divers within a proposal determines the power of the agency to assess the bear on the project volition create in the long-run.

'Capacity' is also another important component of a projection proposal. Donor agencies are interested to know how the organization proposing to implement a projection is positioned with its skills and capacity. For example, if your organization has proposed to implement a project on 'human rights empowerment', the donor agency is going to assess if it has got some previous experience in human rights and at what level. Similarly, whatever women-empowerment projects crave proposing NGO to justify that it has got the right skills to execute such a project. Capacity as well includes the number of experts you take in your arrangement on the subject. In some proposals, they also request information about your staff so that the donors are convinced that the project execution is in the right hands.

Donor agencies while reviewing project proposals are often under the habit of comparison project proposals. In highly competitive bids, this is very much prevalent. How other organizations have framed their project activities and strategies to achieve the desired goals and what type of resources they are using.

Merely the one last thing that influences most donors is what blazon of 'budget' the NGO is proposing inside the proposal. It is not rare that some donors will read your proposals backwards to make certain that the proposed budget is well within reasonable expectations. If the budget is too high (or even too pocket-sized), the donor will non take an interest in reading the rest of the certificate.

When you are developing a project proposal, you need to check the application guidelines to find out if a budget limit has been mentioned. If it is not mentioned, so it is an essential part of your activity to collect intelligence virtually information technology. You tin call the donor agency or research by projects to detect out what is the budget limit. Once you know what the upkeep limit, information technology is a great eye-opener for you to develop the project.

What are the types of budget?

There are two types of budgets: Activity Budget and Line-Item Budget.

Activity upkeep, as the name suggests, covers the costs required for implementing a projection action. For example, if your project strategy is most building the capacity of civil society leaders in your area, and then you usually organize workshops every bit part of the activity. Organizing workshops has costs involved: There are costs towards hiring resources persons, booking a venue where participants tin gather, their transportation cost, food, lodging and materials and handouts.

When developing such an activity budget, you lot demand to break up each and every expense as given beneath. Please make sure that you listing the unit costs of each expense. Whether you are organizing the workshop for ane day or 3 days needs to show that 'per day' expenses of the trainer, participants etc. Then present the total amount of the activeness. This helps the donor go full clarity of the projection activity and its costs.

A Line-Item budget can be known nether different names only they tin can be quite complicated, unlike an Action upkeep. A Line-item budget requires you to present the upkeep under broad areas. As you can see in the paradigm beneath, there are categories (in most cases, given past donors in proposal formats) and yous are required to pause the budget under these categories. Major donors like USAID, European Commission prefer to have their budgets equally line items which can exist quite complicated.

How can I start developing a project budget?

A projection proposal has several components such as project goals, objectives, results, strategies and activities. With so many sections, how and from where yous can showtime the procedure of developing a project budget.

An ideal manner of starting to develop a project budget is to look at your projection activities. Although the project development process requires you lot to get back and forth from goals, objectives to strategies and activities and back again, but once your activities are ready, then you have attain a great level of clarity.

No matter how complicated the upkeep format of a proposal application is, the first step towards developing a projection budget is to first note down all your activities and then attaching costs to them. This is the well-nigh logical and easiest way to develop a budget for a proposal.

How can I use Project Activities to set my project'south budget?

As project activities influence the budgeting of your project, it is important to gain greater clarity about them. If you know the specifications of your projection activities, then budgets can exist developed more easily and more frequently. We will understand this from the post-obit example.

Let u.s.a. say that yous, as an NGO in Nepal, are proposing a project about building the chapters of civil order leaders in the state. Ane of the activities you will mention under this project is:

'Organize workshops for civil club leaders in Nepal'

At present when you start developing a proposal and expect at this action above, you lot will detect yourself a bit confused.

However, what if you accept mentioned the same activeness as:

'Organize 3 workshops for 15 civil social club leaders in Kathmandu'

Don't y'all retrieve now it is easier for you to develop the project budget? In the terminal instance, you lot are now absolutely certain how many workshops you need to organize and for the number of participants and you likewise have the idea of its location. You can speedily calculate the costs based on the higher up specifications.

Fifty-fifty your donor agencies volition be highly impressed if yous visualize your activities with greater clarity and mention them in your project proposal. If your listing of activities is clear and precise, nigh part of your budget work is done!

What are the other costs that tin can be mentioned apart from activity costs in a project budget?

Donor agencies emphasize on covering activity costs. In fact, some donors tin can merely fund activities. However, for larger project proposals, there volition be overheads and staff costs on top of the activities that are listed out. To implement activities you are required to have human resources, an role and other operational mechanisms. These costs often fall nether the line-item budget.

Human resources can be costs towards salaries for project officers, project administration, accountant or even consultants responsible for implementing the activities.

There are operating costs like rent, telephone, travel that are necessary to support the successful execution of your project activities.

Costs towards monitoring and evaluation should as well be included in the budget. In near projection proposal formats, donors crave NGOs to submit a monitoring and evaluation plan. This plan may require actress costs like hiring an external evaluator or carry out extra inquiry work. The costs associated with such a process can be mentioned in the budget.

Some costs for contingency tin be added if your NGO is working in a volatile situation where most conditions are out of control such a conflict-afflicted project surface area. In any instance, y'all need to justify this amount and it may require some break-up to be washed like costs towards communication during an emergency etc.

How to calculate staff time in a project budget?

In some project proposal formats, you lot may have come across 'staff time' or the number of 'human being-hours' required in the projection. Big donors are very meticulous about these details and require minute calculations for the money they are going to give to organizations. So they wait budgets to be clear to the final detail.

Salaries are a very sensitive function of the project budget – even for the donors. More than and more funders are resisting allocating money for salaries and overheads. As they tend to become extremely controversial, information technology is important for NGOs to be absolutely transparent nearly this part of the budget. Donors would be happy to embrace salaries if properly justified.

If you lot are calculating the project managing director'south salary during the budgeting process, you lot tin first ask yourself the number of hours the manager is expected to piece of work in a twenty-four hours. Yous should reflect your local conditions and local market place salary rate. Practice not inflate salary costs unnecessarily as it would irritate donors very easily. To justify the donor that you are paying the salary as per the local marketplace charge per unit, you tin refer to some examples like government salaries or other project salaries.

If your manager is expected to piece of work viii hours a solar day, then you tin can calculate the salary on per 60 minutes basis and the total on a monthly basis. You can mention the number of 'human-hours' the managing director is expected to give in a month's time and the unit as the per 60 minutes rate. And so y'all can mention the full salary of the manager.

Overhead costs refer to those expenses that are required by the arrangement to run its operations and they do not cover any directly expenses of project activities. Still, they still class a part of many project budgets.

Overheads can include part hire, telephone expenses, bookkeeping fees, salaries to the organizational staff, repairs, supplies, travel etc. During contempo years, overheads have become an extremely issue for donors. The less yous talk about it, the better but for smaller organizations without a stiff financial groundwork, the overheads are an important event.

The question is now whether to include overheads or not in your project budget?

Yous should first refer to the proposal submission guidelines to find out if the donor agency allows you to include overhead or at least administrative expenses in your project. Some donors will only fund activities and volition put a condition to grantees that they should not directly propose overheads to them or they should source this type of expenses from elsewhere.

If the donor does permit you lot to include overheads in the project budget, yous can feel a bit relieved. Withal, at present almost all types of donors want NGOs to specify a certain percentage of the overall project budget for overheads. In most cases, it should exist x%-15% but not more that. Even if you mention information technology more than than 10%, and then you demand to provide enormous justification.

Suppose your project is located in a very tough geographical landscape such every bit in remote mountains and y'all require spending a lot of time and resources on travelling, and so an overhead expense above 10% is justified. But in virtually cases, where project conditions are easier, you lot should not request more than 8% of overheads.

Likewise, once your projection is approved, at that place may exist some scope for revising budgets, you tin straight negotiate with the donor for slightly increasing the overhead costs.

What is a Matching Contribution and from where tin my NGO get information technology?

Often you must have encounter in RFPs and other donor proposal guidelines that merely 90% of funding will exist given for the projection. So where will the x% come up from?

This ten% is referred to equally the matching contribution towards the project. It does not hateful that the donor bureau is refusing to take responsibleness for this x% just rather it wants to ensure that there is a sure presence of partnership and a sense of buying well-nigh the project and other stakeholders get role of it.

Simply for smaller organizations, it is still a claiming to source ten%. Below are some of the options from where they can mobilize this ten%

• From own resources
• From another donor agency
• From the casher community
• From local authorities

One important chemical element of matching contribution is that information technology does not necessarily take to be in monetary class. Y'all can explain to the donor that you lot or the beneficiary community is willing to provide an in-kind contribution to the project that volition be 10% of the total budget.

In-kind contribution can be your system's part infinite, the staff time of some of your existing staff like the manager, accountant etc. who may exist getting paid from another project or from the organization's corpus funding.

In-kind contribution from the community tin exist in the class of country and labour and the costs tin can be evaluated and presented in the upkeep.

The contribution from external donors or even the government can too be an first-class option. Many donors will hands extend 10% of project costs because they are getting a chance to get associated with a bigger project at such a small cost. So when you lot arroyo them and say that you take a strong prospect of funding of up to 90% for the project, they volition be more than willing to join you with the rest 10%.

Related:

• A Elementary Step-by-Step Guide for NGOs on "How to write Proposals"
• Summit 25 Tips on How to Write Proposals Effectively for Funding Success
• How to Write a Chief Proposal Template

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Source: https://www2.fundsforngos.org/cat/develop-budget-project-proposal/

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