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The material on this page is for beginners. If you have at least three years’ experience, you might like to look at the menus for very experienced fundraisers, such as connected to this page: https://goodgrantfundraising.org.uk/budgeting.
‘Grantmakers reported that they have particular trouble interpreting the budgets that they receive from nonprofits… As one [foundation] commented, “[I}t has been so challenging to figure out how some things were calculated”’ Drowning in Paperwork, American report on trusts, 2008
Trusts don’t necessarily know much about your area of work, but one thing they’re often good at is budgets. There are a lot of professionals on Boards of Trustees and the ability to read a budget is a pretty common requirement in their worlds.
Your job is to approach funder for a certain amount of money for something. If you don’t know how much things cost, you cannot decide what to include or leave out of the project. That means you can’t accurately write most of the application – the project section nor, by extension, the outcomes nor, by extension, the need. Nor the description of an organisation that is highly suited to that project, expertise delivering whatever it is and so on.
As far as I’ve ever noticed, trust fundraising isn’t like statutory tenders: the funder isn’t looking for the very cheapest possible way of delivering and a significant part of the consideration is on value for money in that sense. Also, you’ll occasionally see trusts comment that they expect the budget to include the costs needed to deliver the project and if it doesn’t, how do they know it will work?
At the same time, I’ve occasionally seen trusts comment that something seemed very expensive for what it is. Also, if you’re a grant maker making grants to projects, you’re trying to achieve as much impact with your money as you can and doing it in the context where there are loosely comparable projects. So, if your project looks pretty over budgeted (or under-budgeted) that does raise questions.
Trusts seem easily to spot budgets that don’t add up, or where the presentation you give in one place is inconsistent with the presentation somewhere else. If there are last minute changes to the project, it’s particularly an issue. For bigger applications, I actually set up my spreadsheets where everything is interlinked, specifically to ensure the figures stay consistent.
There’s a big difference in the requirements of “gift givers” – trusts making quick, intuitive decisions and spreading their money around – and “grant makers” who are looking much more closely at things with a view to making a much bigger grant:
Gift givers
For most trusts likely to give up to £10k, one charity I was at used to just give summaries for the three main costs. The success rates were pretty good and requests for more details were very rare:
(All the names and figures in the above example are made up – they’re just to give a general idea of what we did.)
A couple of decades ago, a charity I was at used to fundraise for alarm units for a vulnerable client group. All the finances that we put in the budgets were: £X for the alarm and £Y for the costs of monitoring it for three years, making a figure in the low £100s. Whether things have moved on and that wouldn’t work as well now, I can only guess.
I’m not necessarily recommending either of the above as the best approach. The more common approach that trusts will see is a broken down budget, and that’s probably safer, though it might take longer to do. (We used the above approach because we had spreadsheets that enabled us to produce budgets almost instantaneously, as long as they were in that format. They’re also a neat length for a two page proposal, where space is at a premium.) However, it worked, which illustrates the kind of thing that I’ve seen work.
Grant makers
if you’re dealing with a trust that requires a very high level of project development, you may need to have quotes for, say, costs over £500 p.a.. However, in general it is just the larger items that need to be well costed in that sense.
Normally, the key costs that need to be well researched and thought through are:
If you can get very precise costs and present them as such, that’s helpful – it’s usually nice and attractive to be able to present a project as being very well thought through. However, focussing on the issues of significant risk and a pretty good use of money, some issues will jump out.
It’s a good idea to include something by way of wider costs of the organisation. A well run “grant maker” trust can expect it and if it’s stopped me getting grants from smaller, “gift giver”-type trusts, I haven’t noticed.
There are two schools of thought about this: