Building Budgets: Presenting Compelling Financials
Having trouble understanding what funders want in a budget?
While there’s no one-size fits all answer to financials and budgeting, there are basic principles that organizations can use to ensure they know what they need to get the work done, and that they can report accurately to funders how the money is spent.
In this webinar we walk through developing an organizational budget, determining if you need program budgets, and how to make sure your grant budget matches your project narrative.This session explores the essential tools and techniques required to master budgetary communication.
Here are the main take aways from the webinar in point form.
1. Budgeting Flexibility: It’s common to include a buffer in budgets, for example, requesting $1,500 for expenses you estimate to be $1,000 to account for unforeseen costs.
2. Justification of Costs: Regardless of the budget’s flexibility, it’s important to justify every amount you include, to maintain transparency with funders.
3. Administrative Overhead: Grant budgets often allow for an administrative or overhead percentage, typically 10-20% of the total direct costs, which helps cover daily organizational operations without needing detailed justifications.
4. Budget Format Variability: Budget formats can vary widely; it’s crucial to use a format that is tailored to your organization’s needs and helps you understand your financials.
5. Grant Templates: While templates can be a starting point for budgets, they should be customized to fit the specifics of your program.
6. Internal Budget Detail: The budget’s level of detail internally should be as informative as necessary for your organization’s understanding and management.
7. Funder Budget Detail: The budget’s detail for funders should at least explain the rationale behind the figures, even if they don’t require itemized specifics.
8. Standard Rates for Travel Costs: For travel expenses, using government rates can provide a standard that funders are likely to accept without question.
9. Comprehensive Travel Budgeting: A travel budget should include all possible expenses, such as transportation, lodging, meals, insurance, visas, and incidentals, along with a contingency for unexpected costs.
10. Knowledge of Local Costs: When budgeting for international locations, familiarity with local costs is important to produce an accurate budget.
11. Using Recognized Standards: For international travel expenses, leveraging recognized standards, like average hotel rates in a specific city during a given month, can add credibility to a budget.
12.Flexibility in Budgeting: Including a miscellaneous category in travel budgets can accommodate emergencies or changes in cost estimates.
13. External Resource Materials: Promises of providing additional materials, such as sample budgets post-webinar, were made to assist participants further.
14. Format Utility: The best budget is not only one that provides insight into financial needs and projections but also one that is practically useful for the organization.