Project Budgets: What To Do (and What NOT To Do) w/ Margit Brazda Poirier
Developing program or project budgets for grant applications remains one of the most challenging, yet critical tasks of any grant proposal. Any mistakes made in this section can cost you the entire grant!
In this interactive workshop, you will discover how to:
- Present the A+ project budget to your funders so they WANT to fund your organization
- Use Instrumentl to get all the info you need
- Avoid 5 critical mistakes that can cost you the grant
Create your Instrumentl account using the link above. Save $50 off your first month should you decide to upgrade when your trial expires with the code GRANTS4GOOD50.
Margit Brazda Poirier, GPC, M.S., Owner and Founder of Grants4Good LLC® (grants4good.com), created the company in 2009 to help nonprofit organizations and businesses find and get grant funding. She is one of only 400 nationally-certified Grant Professionals and 1 of only 30 Approved Trainers in the U.S. on this topic.
Margit and her team have written and received millions in grants for nonprofits and businesses– and she has the unique perspective of understanding both grant seeking and grant making, given her experience leading a prominent New York foundation. Her passion is teaching others to secure grant funding through her online course, All About Grant Writing.
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Project Budgets: What To Do (and What NOT To Do) w/ Margit Brazda Poirier - Grant Training Transcription
Will: There we go. Hello, everyone, and welcome to Project Budgets, What To Do and What Not to do with Margit Brazda Poirier.
This workshop is being recorded and slides will be shared afterwards. So, please keep your eyes peeled for a follow-up email later in case you want to review anything from today. In case it's your first time here, this free grant workshop is brought to you from Instrumentl through its partner network. These are collaborations between Instrumentl and community members to provide free educational opportunities for grant professionals and nonprofit professionals.
Our goal is to tackle a problem that you guys often have to solve for. We’re also sharing about different ways that our platform can help grant writers win more grants. Instrumentl is the institutional fundraising platform. If you are looking to bring grant prospecting, tracking, and management to one place, we can help you do that. And you can set up your own personalized grant recommendations using the link on the screen as well as we’ll share it in the Zoom chat shortly afterwards.
Lastly, be sure to stick around for today's entire presentation. At the end, we're going to be sharing with you some extra resources. And we also have a holiday sort of code that Margit will be able to share as well. In the case where you do, take a step on exploring Instrumentl. More details to come at the end there though.
With that housekeeping out of the way, I'm very excited to introduce Margit to the stage. Margit is the owner and founder of Grants4Good LLC. The company was created in 2009 to help nonprofit organizations and businesses find grant funding. She's one of only a few nationally certified grant professionals and one of 30 approved trainers in the US on the topic of grants. And so, she and her team have written and received millions in grants for nonprofits and businesses. And she has a unique perspective of understanding both grant seeking and grant making given her experience leading a prominent New York foundation. Her passion is teaching others to secure grant funding through an online course all about grant writing, which we'll learn about a little bit later.
We ask that if you have any questions throughout the presentation, please include three hashtags in front of your question to make it easier to stand out in the Zoom chat. Other than that, Margit, feel free to take it away.
Margit: That sounds great. Thank you for the introduction, Will. And thank you for having me back. This is, I think, my fifth time teaching a webinar for Instrumentl. I know I was one of your firsts. Bev Browning was the first. She gets that honor as she should. And I taught a course right after her. So, I'm just really excited to be here again. And I'm really glad to be talking about a topic that I feel so passionate about. And that is budgets.
Now, I am a numbers geek. And always have been. As Will said, I started my company Grants4Good back in 2009. And I track everything. I track my clients, how much money we're getting in, what they're paying me, what their ROI is. I track how many people I train every year. And we're at just about at 20,000 people since I started in 2009. So, you can tell I have a passion for doing this.
And thank you for being one more. Actually, I think we have 685 today. So, that's wonderful. So, Project Budgets is one of those things that most people struggle with. And that's obviously why you're here today.
So, I have geared today’s hour specifically for people who are new to project budgets, newbies to this whole thing about grant writing. But I'm also going to talk a lot, speak a lot to people who have done lots of grant writing, who might be seasoned professionals as well. So if some of this is a review for you, stick with us. And I'm hoping you'll learn something new today, too.
But I really want people to leave this with some very specific details about project budgets. If you want to find me after this webinar, my website is Grants4good.com. And my self-paced online course is Allaboutgrantwriting.com. You'll see all that’s involved there. I get much, much more into project budgets and reporting in that course.
But let's do what we can in the time we have today. If you have no writing, I've read a lot of these already. They’re great. Your name, your organization, the hardest part about project budgets. What I'm seeing so far is just projecting the numbers. What you're going to need for your project budget is a real tough one. Getting information from your colleagues, your peers is also a tough one.
So, today's agenda is I'm going to help you present the A+ project budget so funders want to fund you. We’re also going to talk about how Instrumentl can help you develop your project budget and get you some very critical information that you're going to need to take some of this guesswork out of project budgets. I also want to highlight five very important critical budget mistakes that can cost you the grant. And for this, I'm going to be speaking from the standpoint of a foundation director.
I won't go through my whole background, but I started grant writing in 1993 when I worked for our local municipality. And I started writing grants out of necessity because of the budget cuts that were happening. And fast forward, I was the director of a large family foundation in New York. And I saw so many--it opened my eyes to this whole field of grant seeking and funding and what funders are really looking for.
So, I'm going to talk to you about budget mistakes that I saw when I worked as a grant reviewer and as a staff person for a foundation that I think is going to help you out a lot.
All right. So how to develop you’re A+ budget, you've all seen these kinds of spreadsheets before. If they kind of give you the hives, take a deep breath. It’s going to get better. I really like to demystify how to do project budgets. So, I'm going to share with you some quick tips on what I use in my business in working with my clients.
So, a little bit of background just so we're all on the same page.
Project budgets. First of all, they're different from your organizational budget. I'm sure you know that. Your organizational budget is your operating budget. It's everything you need to do your work in whatever 12-month period is your fiscal year, whether it's January 1st to December 31st, or a different year. Regardless, that's your operating budget. Most foundation, corporate, federal, state grants, they will all want a copy of your operating budget.
But most likely, they will also want a project budget. So, this is specific to the very project you're applying for funding for. Let's say you run an afterschool--I saw a couple of schools here. Let's say you run an afterschool program that helps tutor children that have trouble with reading. And you are nonprofit and you want this after-school program funded. You will need to develop a project budget of just a little cost to have your staff, to have your school open for after school hours, janitorial help, utilities, you name it. You have to have a project budget of what that after school mentoring program will cost you.
And project budgets are required for just about everything. Like I said, a government grant, federal or state, community foundation grants. I read a lot of those. I work with clients. I highly encourage you to contact your community foundation. That's a different story about how to find funders. But definitely check yours out.
Private foundations. They always require project budgets. And I'm going to refer just real quick, after this webinar, feel free to go to Grants4good.com. Check out my blog. There are a lot of articles there. I'm not great about publishing weekly or even monthly sometimes. But there's an article there about the 5% rule and why it’s so important. And we'll talk about that in a moment today as well. And, of course, corporate foundations. They all want project budgets.
So, I’m glad you're here to learn more about how to really develop a strong budget.
I want to start with what's going to feel to some of you, like a very basic question. But it's not something we can take for granted. One of the questions I get asked most often when I teach about budgets is this. Here's an example. My total project budget is $100,000. That's what’s going to cost to transport seniors with low income to their medical appointments. Okay? But I'm only asking for $15,000 for this grant because we're buying a used van to transport seniors. So, do I need to show the entire 100,000 line item project budget?
Well, would the answer be yes or no? I'm guessing most of you are nodding your head saying, “Yeah, you do. You have to show the whole thing.” Even if you just want to buy a van for this program, your project budget cannot be $15,000 for a van. It has to show the 100,000 because foundations want to know what all the costs are involved in the program. The person who drives the van, the maintenance of the van, any kind of staff people, mileage costs, you name it. They also want to know if they give you $15,000 towards your 100. Where does the remainder come from? Where will that $85,000 come from? And they want to know this because if they're going to invest, they want to be sure that you have a plan for securing the remainder of the funds. So, I'm going to give you an example of what that plan might look like for you. So, where could the rest of the money come from?
Well, you've probably heard from various webinars or maybe just reading that diversifying the revenue is really key to having a strong organization. All right? Think about your entire operating budget. It could be in the multi-millions. It might be under a hundred thousand. Regardless, you're going to want to have a fairly diverse revenue stream. Grants are key. Never overlook grants. That's why we're here today. But so is individual giving or annual campaigns saw our fundraising events. So your total project cost of 100,000, it might come from another grant. I'm making this up. Here's the Skylar Foundation. It might come from grants from other foundations. Maybe 20,000 from them. Maybe there's a government grant where you can earmark part of it 20,000. You might have donations, plus, a fundraising event. Another 10,000.
Maybe you run an event or--I work with a youth theatre company. And they have quite a bit of income from their sales tickets. It’s ticket sales, concessions, T-shirts, you name it. 35,000. So, this is just to get you thinking about where the remainder of the money would come from. And don't be afraid to spell out in your grant application where that money is going to come from, even if it's anticipated to come from a foundation or a government grant. Chances are, you don't already have it in hand. I doubt that 15,000 is your last bid that you need to do this project. But this is all about anticipation. It's all about projections, which I know is one of the challenging parts about budgets.
So, definitely, the opportunity to write about this, where in the grant application you write about this. Well, you'll see that in most grant applications, you have the opportunity to submit a budget narrative. It maybe can only be a half a page or a page, maybe more. But you can write very briefly where you anticipate the other sources of funding coming from.
All right. And this really--a lot of people don't do this, by the way. So if you do this, you're already going to be standing out above the rest when you do this particular thing in your project budgets. All right. That's one important tip.
Now, here's another one, especially if you're new to project budgets. Try this. Start with your project expenses first and then go into your revenue projections. Oftentimes, project budget forms from funders, including some of the ones we get from government grants, a lot of foundation grants, you'll see that it shows the revenue at the top and then it'll show expenses at the bottom.
When you work through these, flip it. Start with your expenses because that's going to determine how much you need to raise. So with your expenses, I'll show you some examples of things to absolutely consider so that you don’t overlook them. But you want to do the expenses. And then with the revenue, you're going to project where the money will come from.
Now, here's a second common mistake I see. And believe it or not, I see this among some pretty seasoned grant professionals. Should revenue dollars equal expense dollars in your project budget? I’m not talking about your organization, but your project budget. The answer is, yes, absolutely. Absolutely. When you submit your project budget, revenue has to equal expenses. Otherwise, you would have a foundation look and say, “Well, why do you need the money if you already have more than enough?” Or, if you fall too short in the revenue section.
Foundations might wonder, are you going to be able to meet the rest of your revenue? Can you get that revenue and actually execute the project if we're one of the funders? Okay? So, revenue equals expenses. Definitely write that down if you haven't already. That's key.
So, here's an example of a foundation budget. If I start with my expenses first, these are some typical line items. I took this form from what is called the Common Application form that the Rochester area Community Foundation works with. I like it because it pretty much covers just about everything. And if it doesn't, you can always add a line item.
So if your foundation doesn't already give you a spreadsheet and say, “Okay, Jim, John, Karen,” who am I looking at here? Tanya, if they say, “Okay, this is how I want you to do your project budget,” You do it according to their rules. When in doubt, always follow their rules to a T. If they don't, though, then I would encourage you to develop an Excel spreadsheet to this effect that has these line items. So, these would include the most obvious salaries. Right? Everybody needs salaries, whether you're hiring new people or you need to fund your existing staff, put in salaries.
Fringe benefit, professional fees, these could be consultants. Maybe an attorney, an accountant, a grant professional, it can include any of that. Your supplies, your printing, postage, your occupancy, your rent, if you pay it. Your phone, your travel, training, evaluation costs, some of you work with evaluators, or equipment purchases.
One thing I want to tell you with budgets, though, is there almost always the opportunity to write your miscellaneous expenses. And when you do that, make sure you explain what those are, either right within this line, if you can add text into there. It's one of those fillable forms. Or, do it in the budget narrative.
Bottom line, you don't want anybody guessing. What are miscellaneous expenses? What are they going to be using that $45,000 for? What does that mean? So, don't keep the funder guessing. I can tell you what I was reviewing grant applications. And on occasion, I still do this. I'm a federal grant reviewer as well. The last thing you want to do is have to try to guess where that money is going to go. So, anything you can do to make reviewer’s job easier is worth it.
Now, let's look at the other side. Once you've gone through and determined all of your expenses, now we get to do this guessing game. Let's call it projections. That sounds more official. We're going to project where your revenue will come from.
Now, I know why this is such a challenge. Because don't you find that if we all were sitting down together today at a table and we're writing a grant, let's say, oh, to the Gates Foundation. Let's pick the biggest one. We're writing a million dollar grant for the Gates Foundation. And we know that if we mail--well, if we submit this grant tomorrow, let’s say, that it could take three months, six months, nine months. I actually don't know how long the Gates Foundation takes right now to get back to you. But most foundations take anywhere from three to six months, typically. So, that means you’re projecting forward six months before they approve you. And that means your project starts in 6 months and goes 12 months a year out. So, you're actually projecting 18 months out. That's why this is so tough.
So, here's a trick I use. If this is a program you're already doing, you're a step ahead because you can look back on a 12-month period, bring up your numbers, ask your accountant or your treasurer to bring up your numbers and say, “Okay, what did we spend on staffing for this after school mentoring program? Or, what did we spend on supplies? And what did we spend annually on our rent? And how can we prorate it for this project?”
If you aren't in that kind of a position and you're creating something brand new, then it truly is a projection. But you can still look at approximately what you would need for staffing, how many hours or what percent of somebody's staff time. You can still look at how many people you think you're going to serve and what it might cost per person. So, that's another way to back into some numbers. But your revenue is very much a projection.
So, you'll fill out your requested grant amount. And then just like that slide before, you'll start to think about, “How likely--what do your fundraising events raise each year?” Let's say you raise $60,000 from a big gala and golf tournament. 60,000. Well, all of that 60,000 probably isn't going to one specific project. In fact, a lot of it will probably go to your staffing and general operating overhead, which is where people need the funding. But let's say you could take 5 or 10,000 of that fundraising event and put it towards this mentoring program or driving seniors to medical appointments just making up some programs. So, you see what I mean? You want to start to look at each of these line items and see where you might be able to allocate some of the revenue into your project budget. Especially other foundation and corporate support, maybe some government contracts, any kind of fees, fee-based programs.
As I mentioned, I work with a youth theatre company. And they make quite a bit from their program fees, their sales, their concessions. So, that's always included in their project budget. So, you'll want to include income.
Now, one thing that isn't on this example--and I think I'm going to have to alter this, is in-kind donations. And I would include that in both the expense and the revenue. And I talk a lot more about this in so many more details in my all about grant writing course. But I just want to plant the seed. In-kind donations, equipment that was donated to you, include that in your expenses so that under revenue you can put that under miscellaneous as in-kind. You'll need to know the cost of that equipment and what it would have cost to purchase it. But then you can make sure that that in-kind is accounted for in your revenue and your expense.
So, if you received a Kidney Car, you received a car that has a value of $20,000, it goes into your revenue, $20,000 in revenue, because that's the cost of that car. It's an expense because you need that car. So, it is an equipment purchase, expense. But in your budget notes, you'll make sure to let them know, funders, that this was an in-kind donation of 20,000. So, you want that 20,000, or whatever that number is, to be reflected in both your revenue and your expense so your budget is balanced.
I'll briefly go over budget firms because I know there are a lot of them. But on the whole, you've got your direct cost and your indirect cost. And this is where people kind of start pulling out their hair and thinking, “Yeah, that's sort of a grey area. What's direct? What's considered indirect cost or overhead?”
Well, the easiest way to figure this out, if you're writing a federal grant, a government grant of any sort--state, federal, provincial--I suggest using their definition. If they say something is overhead or indirect, then that's what it is even if you might disagree. So, always go by whatever is stated in the request for proposals in the RFP. Because sometimes, you'll see varying definitions. So, always go just basically follow directions just like we did in school.
Now, if you have a foundation grant or a corporate grant that--and they often don't get this specific, especially the smaller foundations, then go with this definition. Direct costs, because on the whole, direct costs are expenses that are needed to directly implement your program or project. In other words, if this expense was not in your project budget, the program wouldn't happen. So, the staff that are needed to tutor the children or that are needed to drive people to doctor’s appointments, those are direct costs staff. An indirect or overhead cost might be the staff person who is an administrative support to the executive director and scheduled meetings, some of which have something to do with your project budget. Or, sorry, some of which has something to do with your project.
So, that is a step removed. They're not providing a direct service, but they're still part of the program because they're scheduling the meetings, they’re organizing the meetings at which you are discussing your program. So, this is just one example of many. But I hope it makes it a little bit clearer that those direct costs like the staffing, the supplies, any kind of travel or equipment, those are costs that have to be in your budget in order for this project to work. The indirect or overhead costs are ones where that administrative assistant is very important. But they're also doing a million other things. They are not just focused on your project.
So, I know there's a little bit of a grey area. When in doubt, you can always ask the funder. But for the most part, you're going to start to get the hang of which one is direct, which is indirect.
So indirect or overhead, these are expenses that are needed for your organization to function, like your executive director is necessary, your admin or assistant to the director of the board is necessary, and that to a small extent, you need them to implement your project.
Indirect costs can also include any payment you make on insurance premiums. I work with a group of veterans that helps veterans who have been injured from recent conflicts get back into outdoor sports. Sometimes that means getting equipment that is highly adaptive if you've lost a leg, for example. So, the insurance is very high for those programs. We always include some insurance premiums in the grants that we develop for them.
Also, utilities are part of your indirect costs because let's say if you're running an after school mentoring program, you're going to be keeping the lights in today's case, maybe the heat on; other days, the air-conditioning. Any kind of maintenance cost, janitorial, maintenance of your cars, those are indirect costs. And it was interesting because a week before I started this webinar, I posted on my LinkedIn. By the way, look me up. Let's connect on LinkedIn.
I ask people on LinkedIn, “What are some of your project budget questions?” And one thing that came up, and this might be one of yours as well, is what is a typical percentage that you can fairly put into a project budget for indirect cost? So let's say your direct cost is equal to $100,000 to run your project for a full 12 months. How much additional indirect cost or overhead can you pile on to that 100,000? Well, here's the funny thing. It varies so tremendously.
I have worked with--I've coached clients, I've taught clients to do grant writing. They ask me this all the time. And it varies. For some really small organizations, it might be 5%. Add 5% of that 100,000 of indirect cost, now your total project budget is $105,000. But I've seen them go as high as 65%. And maybe you can guess who does the 65%. It isn't most nonprofits. It’s typically coming from larger colleges and universities. They have often negotiated with the federal government a very high indirect cost rate agreement.
It brings me to my next point, when you are writing federal grants or state grants. If you're going to write a lot of these, it is worth it for you to complete the paperwork and develop a negotiated indirect cost rate. You can Google that. Negotiate indirect cost rate. Because then, you will have a set amount that you can ask for from your federal and state grants. And it might differ from federal and state. But you'll have that paperwork to show it.
In the case of private foundations and corporations, if they don't specifically say something to the effect of, you can ask for a maximum of 10% indirect cost rate and no more. That's great. When they give you those instructions, wonderful. It takes all the guesswork out. If you don't have those instructions, however, you are guessing. And I would say somewhere between 10 to 20% is pretty darn reasonable. I think you can get away with that without raising a big red flag.
One thing I recommend doing is remember that $100,000 budget I mentioned? Go ahead and add 10, 15, 20% indirect cost there if that's what your calculation shows. But you may not want to ask for the grant funding to go for the indirect cost because a lot of funders don't want to fund it explicitly. They want to fund your direct costs.
So if you're writing a grant application, $100,000 is your program budget. And you're going to ask for $20,000. I would say ask for that $20,000 for any line item other than indirect cost and get that funded instead. Let your indirect costs come from some other sources, like those fundraising events, individual donations. Again, unless the foundation or the government allows you to include that, in which case, go for it. Okay?
So, I bet there are some questions coming up. I want you to write these down because we’re going to get to these. We’re going to allow quite a bit of time for questions, actually.
I want to talk very briefly about budget narratives or budget justifications. This is basically just saying--it's basically giving more detail about everything you're asking for money for. Remember my point about not making the funder guess? This is how you do it. And I've taught at national level conferences about this. We don't have too much time to dive into it right now. But here's an example that you'll see of staffing. Let’s say, we need one FTE, one full time equivalent. Supervisor at 10% of their annual salary.
What that means is the supervisor makes 80,000 a year. But they're only going to be spending 10% of their time on this particular project. So, in all fairness, we're not going to ask for $80,000 from the foundation. We're going to ask for a 10th or 8,000. Same with the fringe benefits. You'll be calculating what your nonprofit issues for fringe benefits. Let's say it's 20% for a full time position. You would take 20%, not of $80,000 because it'd be too high but of the 8,000 so that you've got $2,080 in fringe benefits as well.
Okay. So, this is one way to never leave the funder guessing where you're coming up with these numbers.
Let's switch gears just a little bit. I want to tell you how Instrumentl can help you with taking out some of this guesswork. So, remember I mentioned that 5% rule? This is really important when it comes to foundation assets because so much of the time you're guessing, okay, what does a foundation have in assets and how much are they really legally obligated to give out each year? Well, the IRS in the United States has a rule that says--and I'm going to paraphrase it. It says that a foundation has to give out at minimum 5% of its annual assets of where they finished last year.
So, let's look at this example. When I got into Instrumentl, I use it all the time. I typed in the KONG Toy Grant Foundation. It’s part of the Pathfinder Foundation. And I see because Instrumentl provides us data, I don't have to go through the 990. I can if I want. Those are free information. Or, I can look at Instrumentl and see what the total assets are. This is an older slide. These were the assets in 2018. Just about 2,300,000, if I were to round up.
So if I want to know how much do they have to give out each year or the following year, I would take 5%. So, I just take that figure right there, multiply times .05. And I know that they have to give out at least 114,000, $115,000 a year. Otherwise, they get slapped with an excise tax. And nobody wants to be taxed. Right? So, they would rather give that money to charitable donations. There are some nuances around that, which I cover more in my own course. But this is enough for you today to know that you can always look at the total assets of the foundation multiplied by .05. And you know the minimum they have to give out each year.
Now, hurray for Toy KONG Grants because, look at their total giving, 590,000. So, they exceeded their minimum 5%. Which I love because when I think about foundations and I look at the stock market, it’s performing. It always goes up and down. But it's been performing pretty well. Even through this pandemic it’s performing well. Seven, eight, nine percent sometimes on average.
So, I like when foundations go above and beyond that 5% rule. So, they are giving out their gained interest and maybe even dipping into some of their principal. It’s kind of the philanthropic thing to do. So, anyway, this is one way that Instrumentl has helped me and the folks that I coach.
It will also help you take the guesswork out of this question. How much should I ask for funding from a particular foundation? What are their typical grant sizes? So, I love this little snapshot here. This is a slide from Instrumentl, is you can type in the name of a foundation, or maybe you're in the middle of a search and a foundation comes up and you say, “Oh, I want to learn more about them.”
Click on there. You can get to this point where you'll see what their grant range is. So in this case, you'll see that this particular funders, most common grant is 25,000. But their range could be anywhere from 2500 at minimum up to 1.25 million. So before, I was using Instrumentl, I would go through all this. And it would take me quite a bit of time. But I would go through IRS 990s to figure out what the average or at least what the median might be so I have some idea. And I love that I have saved hours and hours of time by just getting this data instantly.
So now, I can tell my clients, “Okay, 25,000 is a pretty common graph size.” And we could go up to around 43,000. This is showing that the average is 67,000. So, it's giving you some different amounts here. Clearly, 2500 and 1.2 million are outliers.
I also like that apart from grant size, you can see what types of programs they most typically fund because funders have to submit an NTEE code. Don’t ask me what I missed. I've completely forgotten. But it has to do with their area of discipline or area of interest. And this particular funder makes a lot of grants in Ethnic Studies, also in women studies, urban studies, international studies. So you can see, arts education, that's pretty low on the priority. But some of these other ones are pretty high. So, you'll start to get an idea of where their priorities lie and if your programs fit in alignment with theirs.
Kind of a new feature. And, Will, you may want to jump in if there's anything you want to add. This is a fairly new feature, which I think is pretty great too, is maybe you are approaching a foundation that has never funded you in the past and you're wondering, “We would be a new grantee. How open is this foundation to funding new grantees? Or do they have a specific 5 to 10 nonprofits that they only fund every single year?”
So, this slide gives you some indication of who’s new. And I like that in this case, we see that in 2016 only about 15% were new. But look at 2020, a huge amount of new grantees because they're in the blue here. Probably because, like many foundations, they realized, “Oh, my goodness, there are so many people out there that are suffering from the onset of the pandemic in 2020. And they will close if they don't get grant funding.” So, I'm sure a lot of new grantees were funded that year.
Will, do you want to add anything to any of this portion of what I've talked about?
Will: Yeah, I think you've covered a lot of great insights. I'll put a link in the Zoom chat in terms of a couple things that only Instrumentl can do for folks to check out later. But folks find that they save a ton of time when it comes to just assessing whether or not the fit is there for their organization by using these sorts of data insights. There is no other tool that does this particular insight in terms of openness to new grantees.
And what we're finding is that when we surveyed our customers, they’re essentially saving three hours per good fit funder they’re finding on Instrumentl. And so, each time you're identifying one of these opportunities, you’re essentially able to just cut down the time it’s taken for you to prospect to then focus it on creating this awesome project budget or proposal and getting those out.
And so, there are some new impact pages and case studies as well that we've released on our site that you guys can definitely explore later on. But, yeah, definitely feel free to check out Margit’s link as well, if you've never tried this up.
Margit: Yeah, this is a great feature. Like Will said, it saves a lot of time.
I've been in the grant field for several decades. And I've tried a lot of different--actually, there's a lot of good databases out there that I've liked. And they've all kind of morphed a little bit over the years. I'm using this one the most because it’s the quickest for me. And I'm big on streamlining and saving time so that I can get out and skim when we get that next big dump of snow, which I hope is soon.
But in all seriousness, it saves me time and also many of my clients because we just don’t have a ton of time to waste. We don't want to spend 20 or 30 hours doing funding searches. We want to make it quick and accurate.
So, let me jump into five budget mistakes that will cost you the grant. Okay? You can avoid these. It's not hard to avoid these. The first one seems so common sense. But it's the most common one I see. It's being sure that all your numbers add up. There should be no mathematical errors.
I've consulted with a number of clients. And one of them is an engineering firm that does a lot of great environmental work, my expertise. And engineers are great to work with. They're detail-oriented. They know what they're doing. And yet, I found mathematical errors even in their budgets. And the reason why wasn't that they couldn't do numbers or math, it's that there was one small error in the formula of the Excel spreadsheet that they had created to do the calculations on their behalf.
So, I check everybody’s formulas all the time in those Excel spreadsheets. If you use them, check your formulas. And if you don't, take the old fashioned way with a calculator or your phone, your phone calculator. Make sure you don't have mathematical errors. I can't tell you how many times I see this. It will cost you the grant in most cases. Because I guarantee you, on any given board, there’s going to be one person who's a retired accountant or a current accountant, or someone who's going to go through each and every one of your numbers. Even if they don't read your proposal, there'll be other people who read your proposals and maybe not look at the budget so closely. But you don't want that mathematical error.
Okay. There, I'm done talking about that one. It’s so important.
Number two, you have to define all your expenses. And you can do that by the very specific example I showed you on the line item budget. So when you have a contractual written out, make sure you define what’s going to an attorney or an accountant or grant professional. What does that contractual mean? Is it going to teach artists? You name it. You've got to define that.
Same with miscellaneous. Remember, we spoke about that. So, this just goes back to don’t leave the reviewer guessing.
Number three, you have to link your budget needs and numbers to the activities and outcomes and goals of your project. Now, this can get a little tricky. In my All About Grant Writing Course, I talk a lot about how we do logic models. I link logic models to your budget. We won’t get into that today. But for today, I just want you to know that whatever you’re writing about for your outcomes in your grant proposal, every budget item has to somehow contribute to ultimately leading to that outcome. So, I hope that makes sense.
Fourth, remember to show your in-kind contributions. And I spoke about that earlier. Because so often, many of the people I work with and teach and coach are relying on in-kind contributions, including volunteer time, including that as well as equipment. And if they don't account for those in-kind contributions, the total project budget cost is actually going to look a lot lower than it truly is. And you always want to reflect the true cost of doing your work or you short-change yourself. And you don't want to short-change yourself. You want to make sure you know the true cost of your work so that you can gather all the funding you need to do it.
And lastly, this is government talk here. Costs must be reasonable and reflect the true cost of doing the project. This comes straight out of federal grant, RFPs. And all it means--this really is common sense. All it really means is you don't want any big outliers or red flags. Reasonable, meaning, you don't want to have a project budget of $100,000 and have your computer cost be $80,000. Because people are going to say, “Whoa, that's a lot of money on computers.” And that might be because your computers are going to be serving everybody in the entire agency, not just your project staff. So, that's going to raise a red flag, for example. So you want to make sure that your expenses are balanced realistically and just focus on the cost of doing a project for project budgets.
Okay? So, those are five. Maybe you took some notes. Maybe you're going to look at the slides when you're done with this. And I'm going to address one more question that came up. Maybe it’s your question as well. I haven't looked in the chat yet since I've been presenting. But this is a question that came up on LinkedIn. Again, when I asked the question, what are some of your challenges? What are your questions about project budgets? This one came up. And the answer is, you plus one or more of the following on this list. It could be, if you're working in an agency where you have a CFO, Chief Financial Officer, great. You're going to need their help.
Your CEO, Executive Director, might be involved. Maybe your director of development because they know how much they're anticipating from a fundraising event and from individual donations. They could help you project how much revenue you can expect. Maybe you are that Director of Development.
Project staff. Don't underestimate your project staff to help you with estimating how much staff time it will take to run, let's say, this after school mentoring program. They know. They're doing the work on the ground every day.
Also, think about any partners or collaborators. Many times, you might be sub-awarding a graph. You might be paying. You might receive a million dollars but pay 50,000 or 100,000 to a collaborator. So, you have to put that in your budget.
The cost of your contractors. Maybe you're hiring a third-party evaluator. You'll definitely want to cost scope from them so you can put them in your budget.
Sub-awardees, I just mentioned. You might want to include your board or your board treasurer. So, this is a partial list. Yet, you’re thinking of people that can help you gather the information and also put together a realistic expense and revenue budget.
So, we're going to start moving into Q&A very soon. Again, learning takeaways. I hope you got some of the key things I mentioned. Throughout this, there were many. One of the greatest compliments I ever got was from a--one of the very first people who signed up from my Allaboutgrantwriting.com online course, and that is Maryanne Cooper. She might be here today. And she said, “Margit, I really liked how you present. There's no fluff.” Ever work on a webinar where people just constantly talk about something that has nothing to do with the topic?
So, I really hope you left with at least a few key takeaways that are going to help you improve your project budget and make that a plus project budget. I hope you wrote down or we'll look at five ways to lose the grant so you don't make these mistakes. And finally, get help from Instrumentl. Try it out for two weeks. That's what I did because I don't really like to jump into a big purchase right away. So, try it out. I think you're going to love it.
And then you can use my coupon code, which, by the way, I have another one for you. And also, you can sign up for my course, All About Grant Writing. I have lots of budget templates and I talk a lot about budget in that course.
Real quick because this is one of the things that you'll be eligible for today since you're here today is to get a special discount code for my All About Grant Writing Course. We are near the end of the year. This is a great time to see what you have left in professional development. Purchase the course. You can take it next year if you want. This is a course that’s self-paced. So if you buy it today and you're just too darn busy right now closing out all your accounts, it doesn't matter. You have it for life. You have this for life. So, you can start at any time.
You'll learn the skills, definitely, to raise six figure or larger grants. You will get the proposal done while you are completing the course. I designed it so that I am basically walking you through every single step from researching the best funders using Instrumentl. And also, writing every single section of the grant, including the project budget.
And as I mentioned before, you'll get lots of templates. So, write down Grants100. You'll get $100 off if you register in the next week.
And finally, I would love to stay in touch with you. I'm so glad you trusted me with your time today. And I’m at Margit at Grants4good.com. Check out my website, the online course. And by all means, let's connect on LinkedIn if you are on LinkedIn. And I'm going to hand it over to Will because he's got--oh, well, he's going to tell you about--all right. This just happened, by the way. I just texted Will and I said, “Hey, Will, isn't there some kind of a holiday special going on?” And he told me, yes. He goes, “Just until January 15th, you can use the code Grants4Good75 to get $75 off your Instrumentl subscription, instead of the usual 50.“
Margit: Okay. So--
Will: And that’s fair.
Margit: I thank you for honoring that, Will. This is how I look at it. This is why I'm a grant pro. I figured if you don't ask, you don't get. The worst thing you could have said is, “No, Margit. You're making this up.”
Will: Yeah. Absolutely. So for folks that haven't created their accounts before, now is a great time to do so. You can definitely do so with Margit’s link. And that'll save you off your first month with instrumentl.
We got a ton of questions, Margit. So, we’ll definitely start jumping in through those.
Will: And that's a code for new folks, by the way, for the folks in the chat that are chiming in right now. But, essentially, the first one that I have is from Jacqueline, which is, do you include the grant request in revenue?
Margit: Yes, you include the amount that you're requesting in the revenue column. And you can do this at least two different ways. One being, in the example I showed, the very first line was grant request. And I would put that dollar amount in there so it becomes part of your revenue. The other way to do it is to include it within the line that says foundation or corporate grants or government grants, whichever kind of grant you're asking for. So, yes, definitely do that.
Will: Morgana asked, “When funders asked for the total cost of the project, do you include the value of in-kind donations and volunteer contributions?”
Margit: I do whenever it's possible. And guess what? It isn't always possible. And you know why? Some nonprofits, for good reason, don't--they just aren't gathering all the information about volunteer time.
And, honestly, if you included your board members and a lot of your volunteers, it might inflate the budget tremendously. So, you have to use some discretion to what extent you're going to count your volunteer time. But I would include it. But definitely include equipment cost. There's a great--here, let me put this in the chat. There’s a great website, law for calculating volunteer time. It’s called independentsector.org.
Will: Awesome. And that answers one of Yvonne’s questions. So, I'll remove that from the queue.
Margit: Oh, good. Yeah. Independentsector.org will give you an hourly value of volunteer time depending on your region where you’re located. It's a really great tool.
Will: Perfect. Michelle asked if you'd include salaries even if they’re not going to fund salaries.
Margit: Include salaries in the project budget? Absolutely. Definitely include it in the project budget. Just make sure that your grant request isn't for the salaries because the funder won't fund it in this example that you're giving me.
So, I'm glad you mentioned that because this always goes into your funding research. You have to know what the funders will and will not fund. Some will only fund equipment. Some will only fund staff training. So make sure you know that so that when you do your project budget and then you write up separately, or maybe they give you a form that says how much or where will this grant go to, make sure it does not go to salary. But you have to include it because, otherwise, it's a red flag.
Reviewer will say, “Well, if they're not asking for salary, who's the actual person that's going to be doing this work?” Right? So, yeah, good question. Definitely.
Will: Joyce asked, “How detailed in a line item should a budget get? For example, if it's a mentoring program, list speaker fees, student workbooks, office supplies, snacks incentives, is this the right track, or do we add overhead as well? Some guidance there would be useful for sure.”
Margit: I would go fairly detailed with the explanations. But not to the point where you're talking about paper clips, pads of paper, pens, those things. That would just be office supplies. So, you can lump sum things together. When you talk about--I think you don't see the question, but something in effect of food and beverages, you can just mention that that is refreshments or meals. So, you'll want to lump sum things together. But definitely, just don't keep the funder guessing.
If you have any doubt, have somebody in your office read it or even a peer or a friend look at this and say--so they can look at it and offer you any questions if they're unclear.
Will: Gwen asked, “You mentioned diversifying revenue is really important. Do you think it makes you more competitive to incorporate other types of revenue instead of asking for the whole project from the grantor? Would a grantor be more likely to fund a project that says, say for example, individual donations?”
Margit: My experience over all these decades is there are very few foundations and corporate foundations that want to fund the entire project budget. Very, very few. So most of the time, in that case, you’re going to be asking for a portion of your project budget from the funder. Which in a philosophical sense, is rather inconvenient because it does mean you have to come up with another funding or that you might have to patch together a couple different foundation grants to meet your project budget. But that is the trend. That is what I've seen. That's what I'm still seeing.
The exception is in many federal grants, you show the project budget and you are asking for the entire amount. And you would likely get the entire amount if you are funded. So, federal grants are a bit of a different situation in that case.
Will: Got it. And before we go into our next question, I want to make sure that I get this message into the Zoom chat since I know sometimes folks are right up on the top of the hour. There’s a feedback form for this workshop with some freebies and things like that that Margit has graciously offered, as well as Instrumentl’s freebies on the screen.
And we'll also be back next week for our final workshop of the year. It's going to be with a customer of ours, local non-profit, and how they secured 30% more in grant funding with the help of Instrumentl. We just had another customer spotlight about a week or so ago where the director there had raised a million with Instrumental. And so, definitely feel free to check that out in the case where you're looking for more tips and tricks to what Margit talked about today.
Taylor asked, “What about staff that work on multiple projects? How do you divide their labor cost between overhead versus projects?”
Margit: Yeah. I mean, most of your staff are working on multiple projects. As far as I know, my experience with people working in nonprofits is they are usually juggling a lot of different things at once. So, this is going to be very common.
This is where the guesstimate or the projection has to come in where you have to estimate what percent of staff time is going to be devoted to a particular project, direct service to a particular project, a direct cost rather, versus indirect, versus working on something completely different. So, it might be 10% of somebody’s staff time in a 12-month period. It might be 20% or more. Or you might hire a brand new full time staff strictly for that project, in which case, it’s 100%. So, it really depends on the project.
When I used to work for the county and started grant writing back in the early 90s, we were doing something called Total Quality Management. It’s called something completely different now. I think Six Sigma is similar. But we actually had sheets where we started tracking things by project. So, you might even want to go that route and start now. There are so many great apps you can use to track your time. Start tracking what you spend per project, and you'll start to get a pretty good estimate of what you're going to need for any particular focus project.
Will: Kristen asked, “Would you include the executive director salary as part of the program budget?”
Margit: Yeah. I do recommend doing that when it's appropriate. I really do because, oftentimes--it depends on the project. But so many times, especially in a smaller nonprofit, you know that the executive--or maybe you are that person. The executive director is doing 20 different things at any given time. They might even be writing the grant applications. They might be implementing the programs or doing the marketing. So a lot of times, the executive director is very key in delivering a project or a program. So, if that's the case, absolutely include a percentage of their time. Yeah.
Will: And this is a similar question.
Margit: It’s directly involved. You could include a small percentage for overhead too.
Will: And this is related to that kind of line of questioning from the DuPage Federation, which is, “With the grant staff who write the monthly grant reports and impact stories, would the project be a direct cost or an indirect cost?”
Margit: Oh, this is a good question. Because if I understand it correctly, you're asking me about the costs of the staff time to write the reports to the funder. Is that right? If so, technically, no, I would not include that staff time.
Report writing can sometimes be very quick and easy. If it's a foundation, send them a one pager and let them know what's going on. If it's a federal grant, you are writing quarterly reports. They're detailed. They’re collecting receipts. You could only include that time if it's approved by that federal RFP.
In general, though, I would say no.
Will: Yvonne had a great question. “What are the best practices to prevent double dipping? For example, asking multiple funders to fund the same activity for the same project and/or over allocating personnel time for staff working on multiple projects.”
Margit: Yeah. Let me talk about that first one. In all the years I've done this, and we're talking many years, there have only been two. I would say maybe two instances where the client where we applied for numerous grants got all of them. And, actually, exceeded the revenue projected in the project budget exceeded it.
And so, what we did in that case--this is a good problem to have. And what we did in that case is we went to the one funder that we knew would be most flexible, where they had a good relationship going with them. And we said, “Look, we have this great problem. We’ve exceeded the revenue that we thought we would get. Could we use your funds, accept them today, but use them in the following year? Or could we extend them? Or could we extend the project scope to another city or community?” And they always say yes. Almost always.
And the reason being is when a funder issues a grant, they don't want the money back because their accountant has put into their 990 already. They might have filed their tax returns already. It’s a nightmare to give back money.
So in the rare instance that happens, there are many ways to just treat people like people and say, “Look, here’s what happened. Could you work with us? We still want to do a lot of good work. But can you work with us?”
More often than not, it is just important to apply to several foundations at once, usually for the project budget.
Will: Ann asked, “If you're asked by a funder to provide data on a program's financial efficiency, what numbers or ratios might you pull out of your budget to speak to that?”
Margit: It depends on what they're asking for. I guess I would ask them what they mean by financial efficiency. It’s a very vague term. So sometimes a funder might ask very specifically, what is your cost per participant? That's one data point I see quite a bit.
So at school, for example. What is your cost per pupil? And the way you would calculate that, the way schools do it is you would basically look at the number of people you are serving, your total operating budget, and divide the number of people into that operating budget. You get a cost per person.
Is it the best way to measure things? I would say no. But it is often a number that's requested. So if it sounds vague like that, I would ask them what they’re asking for.
Will: And this will be the last question we get to today. So if you did not get your question answered, please do reach out to Margit via her email. It'll be included in the slides as well.
Francine asked, “As a freelance grant writer, are you responsible for getting estimates or quotes for budget items? Or is that the responsibility of the client? Often the client wants me to do the research to pull the budget together.”
Margit: Well, that's interesting. So my company, Grants4Good, as myself and four others, and we've been doing this since 2009. What I found works best when working with clients is to develop a template project budget for them and ask them for the numbers that I need. So rather than--and I know grant writers who will hand over this template and say, “Here, you guys work on this while I do the grant proposal writing.” And guess what? A week will go by, two weeks will go by, and you still look at your project budget. Because so many times, not always, but so many times, the person looks at a blank sheet and they say, “I don't know what to do with this.”
So, what I would--if you are a consultant and you're doing this with clients, I recommend filling in as much as you can in the project budget and giving it to them. Or better yet, ask them very specific questions and you fill in the project budget so you can make sure the math is right, the percentages are working out. You know the rules in that or what you need to do to have a top notch project budget that's going to get them funded.
So, I think it's important as grant pros that we--I do a lot of coaching with folks and we coach people through how to do that well and do it with them. Yeah.
Will: That sounds really similar in a tangentially related topic of what Rachel Waterman teaches in terms of getting stellar support letters and feeding the questions to the client to fill in the gaps through a--
Margit: Absolutely, send those letters of support, develop it for them. Yes. Exactly.
Will: Awesome. Well, that brings us to the top of the hour. Thank you so much all for spending the last hour with us. Thank you, Margit, for coming back on. Be sure to check out Margit’s course and take advantage of that deal that she’s got for you all in the next week. And look out for the replan slides coming your way in the next few days.
Margit: It’s great to see you all. I didn't get to see everybody. But I see a lot of people on their video cameras. Thank you for that. And I hope we stay in touch. Let's connect. All right. Bye-bye.
Will: Bye you all.