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Introduction
All proposals should include a budget which clearly delineates costs to be met by the
funding source and those provided by other parties and outlines both administrative and
program costs. If a proposal is for a specific project, separate budgets for
the general operating budget and the special project budget should be included. Budgets
should show income as well as expenses and should be structured in columnar form, listing
the expense on the left and the dollar amount in the right column, according to general
accounting/bookkeeping principles. Budgets should not be submitted in narrative form.
A detailed budget proposal is always a part of the fundraising paperwork. Unless you are required
to submit a special form for the same purpose, make a financial annex including at least:
- income budget projection
- itemized expense budget
- breakdown of the requested donation
Income Budget
- Categorize: First think of the main income categories (e.g. participation
fees, sales, guarantees, donations, etc.). Get into details only after all categories are well
defined.
- Classify: Number each and every item in your budget. Follow a logical
classification method. This will prove vital in referring a budget item in your correspondence,
negotiations and during compiling a financial report.
- Estimate: Estimate your possible incomes for each item. Do not
overestimate your incomes, be pessimistic, think a worse scenario than you expect. You can always
return extra money you raised, and it is easier than trying to fundraise again.
- Prioritize: Try to make your project modular and flexible, and
set your priorities, identify the most essential budget items. This will help you to maintain
the functionality of your project as much as possible if you end up with less money than you
have expected.
- Synchronize: Synchronize your income flow with your expense flow.
Plot the money flow on a time-flow axis graphically. This will help you to identify how much money
you will need, when at at what stage. This will allow you to be more flexible with your sponsors,
if they prefer release of funds over a period of time, or after each step is completed.
- Balance: Total expenses and incomes should balance each other.
If you have less incomes than expenses (which must be the case if you want to fundraise); the
last income item should read something like "Still to be raised".
Expense Budget
- Categorize: Start with main lines and identify major expense
categories. Once you know the main lines, define subcategories. Only then start itemizing each
subcategory. This method (breakdown structure) allows you to keep an oversight of your expenses
and reduces the risk of forgetting any expense items.
- Itemize: For each item, indicate the basis of calculation (eg.
10 notebooks $ 5.- each, $50.- for notebooks). Number each expense item.
- Validate: Check the reliability of your figures. If you can find
actual costs, do not estimate. Spend time in enquiring item costs. This gives a realistic image of
your expenses, and serves as a clear indication that expenditures are well planned.
- Reserve: Always reserve an extra budget (circa 5%-10%) for "Unexpected
Costs". They will definitely be there. If you don't budget them, you cannot justify them later!
Breakdown of Requested Funds
Some sponsors might wish to be informed how exactly their donations will be used. Be prepared
to provide this information if requested. This would mean that you are to couple the requested
amount to one or more expense items in your budget. For easy comparison use the same numbering
as you used for the expense budget. Make sure that you use the donation according to the breakdown
you have submitted, otherwise you might loose a donor or even have legal problems. Due to its
restrictive nature, avoid detailed breakdowns if you are not asked for it.
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