Understanding Budget Basics: A Primer to Writing Grants for Newbies

Want to jump into grant writing - as a grant seeker and/or

writer? Do you know someone who might or should be? Did

you know that if you’re a good and ethical writer, (more on that topic next week) and work to build a successful track record, grant writing is lucrative work? During my master class next month, I will show you how to research funding opportunities and develop the initial strategies needed to craft a winning proposal, to go beyond merely writing one. LEARN MORE. This week’s post delves into more ways to become “grant-ready” equipped with budget/business knowledge that goes along with grant/proposal writing basics. By creating solid This week’s post delves into more ways to become “grant-ready” equipped with budget/business knowledge that goes along with grant/proposal writing basics. By creating solid financial plans that can greatly increase your fundability. In this work, as a grant seeker or writer, TIME IS MONEY. A well-prepared fiscal plan can significantly impact an organization's ability to achieve its mission and sustain its operations. And even if the funder accepts proposals from individual grant-seekers, you still need to create a budget! How much does it cost to plan and implement this project? How much time do you have to spend the funds? Budget Basics to Grant Readiness.

There are a variety of budget types that nonprofits will use. As all nonprofits do, a new or

start-up organization, should create an annual budget, or operating budget. This is the budget that reflects your annual projected revenue and expenses for the entire organization. It categorizes your revenue by different funding sources (grants, contributions from donors, fees for services, in-kind donations, etc.) and your operating expenses (your costs to do the business) by program and overhead costs.

Here’s a tip: There are free templates easily available online. Using the template can help

you organize your finances: manage expenditures, track funding sources, and plan for the

future. You can use software like QuickBooks. PLEASE: Learn to “master your money” - get

your nonprofit’s business house in order from the start if you want to become fundable.

Depending on your organization’s operations and plans, it may also be helpful to create

budgets focused on specific aspects or a component of your organization. For example, you

might create the following budgets for a specific purpose or goal:

• Program budget: If you’re looking to start a new project or program, you may create a separate budget that covers the specific revenue you’ll need (how much do you need to implement your program) and the expenses you expect to incur (how much is it going to cost) while launching the program. Be sure to consider both the one-time expenses, also known as “start-up costs,” involved with launching the program as well as those that you’ll need to incorporate the program into your annual operating budget from year to year.
  

• Grant proposal budget: Whether you’re applying for a grant as an individual or a nonprofit, you may need to develop a specific budget describing how you will use the grant; along with a budget narrative, that is your written justification for the “why or need” that reflect reasonable costs for the grant monies you are requesting.
  

• Capital budget: This budget tends to cover a nonprofit’s capital campaigns and other major expense campaigns; it projects the expenses and revenue associated with things like building projects – efforts that typically require a multi-year, long-term, sometimes millions of dollars of investment. Some funders will not allow their grant funds to be used for capital campaigns. Carefully read the funder’s guidelines!

Understanding the different types of budgets is part of grants management. It’s a business.

Basic Types of Nonprofit Budgets – An Overview

Operating Annual projected revenue and expenses for the entire organization.

Program Project revenues and expenses related to a specific program or project, including one time/start-up costs.

Grant Proposal Describes why you need and how you will use therequested grant funding – what specific costs/why?

Capital Campaign Fundraising expenses that may require multi-year efforts e.g. building & construction projects.

Finally, remember to review these budgets regularly, throughout the year, to monitor the

process of your various projects, your fundraising success, and your general financial

standing.. It means your nonprofit’s budget isn’t something that you create but never look at

again. Instead, it’s a living document that should be at the center of your organization’s

financial activities. Check out Big Mama’s Playbook for potential grant opportunities!

Weekly wisdom, in their own words:

“If you have a setback, if you have a loss, if you have something that tries to break you, use that as motivation. That’s why I’m a hurdler – I like to get over stuff. I’m still in this fight.”

-Lolo Jones (1982 -)