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Simple steps to creating a budget for your funding applications

| Ruen Govinder | SEC Blog

If your social enterprise is registered as a nonprofit organisation, you are likely submitting grant proposals for funding. [Read “Finding Funders for Your South African Social Enterprise” for tips on where to find funding opportunities]

When drafting a budget for a grant proposal, it's important to present a comprehensive and well-justified plan that aligns with the project's objectives and demonstrates responsible resource management. Here are some key considerations and steps to follow:

laptop notebook computer macbook work screen1. Understand the Grant Requirements: Carefully review the grant guidelines provided by the funder to ensure that your budget follows to their specific requirements, such as which expenses are allowed, what budget categories are, and any limitations or restrictions.

2. Identify Project Expenses: Develop a detailed list of all the potential expenses related to the project. This may include staff costs (salaries and benefits), operational costs (rent, utilities, supplies, equipment, and transportation), professional services (consultants, trainers, or specialists), and other direct costs specific to your project's activities.

3. Categorise Expenses: Group your expenses into logical categories that align with the grant application's budget format or the funder's requirements. Common categories include staff costs, travel, equipment, supplies, contractual services, and other direct costs.

4. Determine Staff Costs: Estimate the time commitment required for each staff member involved in the project, including their roles and responsibilities. Calculate the salaries based on their hourly rates or annual salaries, and include any applicable benefits, such as medical aid, pension contributions, or taxes.

5. Consider Indirect Costs: Many grant programs allow for the inclusion of indirect costs, which are administrative or overhead expenses that cannot be directly attributed to the project but are necessary for its successful implementation. These may include office rent, utilities, insurance, and administrative staff salaries. Check the grant guidelines for the allowable indirect cost rate or calculation method.

6. Write a Budget Narrative Justifying Expenses:  Accompany your budget with a detailed budget narrative that provides explanations and justifications for each line item. This narrative should clearly demonstrate how the requested funds will be used and why they are essential for the project's success. This will help the grant reviewer understand the necessity and reasonableness of the requested funds.

7. Review and Revise: Carefully review your budget to ensure accuracy, completeness, and compliance with the grant requirements. Double-check calculations, and make any necessary revisions or adjustments.

8. Seek Feedback: If possible, have colleagues or experienced grant writers review your budget and narrative to identify any potential oversights or areas for improvement.

Remember, a well-crafted budget not only demonstrates responsible resource management but also builds trust with the grant reviewer by showcasing your organisation's financial planning and commitment to the project's success. Think of this as an opportunity to show the funder that you have carefully thought this project through. By thoughtfully following these steps, you can create a comprehensive and compelling budget that increases the chances of securing the desired funding.

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