It’s not often you can reference a fairy tale when talking about project planning and grant writing. But today’s topic features Goldilocks. When it comes to creating your grant budget, think Goldilocks – not too much, not too little, just right. You want to have enough money to do the project or deliver the service properly. You don’t want to lose money or do a half-baked job because you didn’t cost it properly. At the same time, you don’t want to miss out on winning grand funds because you gold-plated it.
So how do you get that grant budget ‘just right’?
Firstly, you need to really know what’s going on with your organisation’s finances. Before you can begin to feel confident about project budgets, you need a strong handle on your operational costs. A close working relationship with your bookkeeper or accountant (or whoever oversees finances) is critical. You need to know that your organisation is operating within its means and understand the costs of doing business. This is especially important when applying for a grant that allows you to include a percentage of your operational costs or an aspect of operations. You must be able to justify your inclusions, not just take a stab in the dark.
Now you can look at the project budget. To determine what needs to go into the budget, break down the project elements in fine detail. Think about things you’ll need to buy, as well as the time needed to implement the project – anything you will have to pay out money for or provide ‘in-kind’. For example, a local government might already have the machinery to do the earthworks for a building project, so the time-cost of these machines could be provided as part of the organisation’s contribution.
Common grant budget mistakes
It’s vital to get proper costs for all of these items. Mistakes I’ve seen when I’ve been a grant assessor include organisations only seeking one quote (that’s either way below market value or pretty steep); or basing their costs on getting discounts for items (for example, EOFY sale that finishes before receiving the grant approval). I’ve also seen organisations inflate staff hours to try to leverage more funds to subsidise operating costs. Remember that grant assessors see many applications from similar organisations or projects to yours and know what’s reasonable.
A rookie mistake is not considering GST implications. Most quotes you receive will be inclusive of GST (especially if you are looking at retail items). However, most grant applications ask for the GST exclusive amount (the funder will pay the amount requested + GST, but want to see the numbers ex GST). Some applicants add up the GST inclusive costs but put that figure in the grant request amount (so essentially asking for 10% more). Others have a mish-mash of inclusive and exclusive added together. It gets messy. If the grant application requires you to attach quotes, chances are the grant assessor will compare your budget figures with the quotes. If it doesn’t line up, they’ll send it back to you.
Other things to keep in mind
You also need to consider the long-term financial implications of the project, particularly where the project will enter another phase once the grant funds are finished (such as an infrastructure project that will become operational on completion). Will there be the need to maintain, repair or replace assets? Is insurance required beyond the grant-funded period? Also, check whether insurance is a permissible cost under the grant or whether you’ll need to fund it. How will you pay for operating costs, including staff time, once the grant funds are finished?
In short, base your requests on quotes, be realistic in your estimates of time and resources, and find the right balance between gold-plating and bootstrapping. And triple check all your numbers before hitting submit.