A budget simply refers to a document which specifies how money will be allocated to implement the activities described in a proposal. The budget gives a clear picture of all expenditures involved in carrying out a project. It is a description of the project in numbers.
A proposal budget includes the details of all income and expenditures for a project. This allows the donor to determine the value and cost-effectiveness of the project. A proposal budget puts a number to achieving the main goal of a project. The budget is often seen as a more unprejudiced, factual account compared to the narrative part of the proposal. Numbers cannot lie. But a bad budget can ruin a great proposal.
Common Mistakes in a Proposal Budget
In this part one of two articles, we will discuss 5 common mistakes that an organization makes in a proposal budget:
Not Following Grant Proposal Guidelines
Most donors have their own set of guidelines for proposal submission. As a fundraiser, you need to understand those guidelines and design your budget accordingly. Read the request for proposal (RFP). Read it thoroughly and follow it exactly. If the donor provides a budget template, use that budget template. Many NGOs may feel they can get away with using the format that they have already prepared, only to be rejected in the first round. Donors will not even read your proposal if you do not follow their guidelines. While it may seem annoying or unfair, always remember you are asking their money and not the other way around.
Focusing too Much on the Need of Your Organization
Donors are not giving money to your organization’s sole benefit. Grants are not just meant to pay your organization’s operating cosofke rent, staff payroll, etc. But every project comes with operating cost, which needs to be paid. When you ask for an operating support in a budget, identify the cost to the project and justify it in your narrative. Define why it is necessary to incur the cost to perform the project and how it is going to benefit the targeted audience and achieving the goal.
Budget Doesn’t Match The Narrative
The budget should not only add up, it also has to support the logic of the proposal’s narrative. A budget should always match the narrative part of your proposal. From a donor’s perspective, the budget is the main proposal. Always re-check if you have over or underestimated the cost described in your goal statement.
One of the most common mistakes, which can be easily stopped, is the mathematical error. Double and triple check the equation. With so many free application available today, getting a basic mathematical error is more than a silly mistake; it shows your incompetence. Make all of your budgets in a spreadsheet program like Microsoft Excel. These tools make it easier to formulate, calculate, and organize the numbers.
Make sure it is easy for donors to look at your budget and easily understand what is going on. Budgets can make or break a grant opportunity. Your proposal should please the reviewer not irritate them. Always put commas in between larger numbers. Numbers with commas are much easier to read. Use the columns and use singular alignment to the right. The list of ‘particulars’ should be short and to the point. Use different categories and always number them. They should be easy to follow.