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Julie Bornhoeft

About Julie

Effective Budget Justifications

Budget justifications, or narratives, pose an interesting challenge for the grantwriter. In written form, the writer must articulate how a figure was derived; demonstrate its importance; and tie it to the overall proposal. In the best situation, the justification fits seamlessly into the proposal. In the worst situation, it ends up a jumbled mess that weakens the proposal.

Several factors contribute to budget justification success:
  1. The level of time and detail devoted to constructing the budget.
  2. The grantwriter’s knowledge of the program budget.
  3. The author of the budget narrative.
The level of time and detail devoted to constructing the budget.
The budget justification can only be as strong as the budget itself. A proposal budget that was hastily prepared poses challenges for justification. How do you explain a figure when it was "pulled out of thin air"? The funder must see an explanation that budget figures are based on knowledge and/or experience.In the June 11, 2002 issue of Grants and Foundation Review, the option of using a Cost Per Employee Formula was discussed. The CPE formula offers an option for clarity. Even if a formal formula is not used, the budget justification must contain a valid explanation of how a figure was reached. At the minimum, a budget should be based on expenses for similar programs.For example, Our House prepares a proposal for a 24-hour crisis nursery in Anytown. The program requests $300 per month for marketing and outreach materials.

The program requests a total of $3,600 for outreach materials based on $300 monthly. The monthly figure is based on the agency’s Cost Per Employee formula ($150/employee/month x two employees for twelve months) and is validated using the agency’s actual outreach expenses for its crisis nursery in Othertown. The shared demographics that justify opening a second nursery also validate quantities of outreach materials.The $3,600 in funding will be used to produce 10,000 flyers ($1,000); 5,000 brochures ($1,500); and 2,000 new parenting packets ($1,100). The agency has negotiated with a local printer to produce these items at the above costs. The printer, in turn, agrees to produce 100 volunteer training manuals at no cost. The $1,000 value of the manuals is reflected as matching funds. A bid agreement, valid for 180 days, is attached verifying bid and in-kind contribution.

The grantwriter’s knowledge of the program budget.
Grant proposal writers are often seen as good writers rather than number crunchers. A grant writer that understands how budget figures were determined can use their natural writing strengths. The best writer cannot defend a figure if they are not informed of the rationale. Grant writers should participate in budget meetings. By participating in the budgeting process, the grantwriter comprehends how figures are determined. Furthermore, the grantwriter needs the same information when writing the proposal to explain staffing patterns, etc.

For example, a proposal’s training line item is increased to train program staff on a specific curriculum. The training is critical to the program’s success. The grant writer must be aware of this one time expense in order to justify it as critical to the program. An unaware grant writer is left trying to explain what appears to be an inflated training expense. On the same line of thinking, a hastily prepared budget may not recognize the training need and under budget in this area -- undermining the proposal and the project.

The author of the budget narrative
In many instances, the budget justification is the only portion of a proposal not written by the grant writer. The task is often given to the finance officer that developed the budget. While this seemingly makes sense -- and works in some situations, the end result is often a budget justification that reads inconsistent from the rest of the proposal. It is obvious when different authors are used on any aspect of the proposal. If this is the case, the grantwriter should edit the justification thoroughly to ensure that it has the same tone and feel as the rest of the proposal to ensure it reads well for the reviewer. The grantwriter must also cross-reference the budget narrative to the remainder of the proposal to ensure consistency in titles, figures, and other key points to avoid contradictory figures and statements.

Regardless of any challenges the budget justification poses, the grant writer remains responsible for ensuring the strongest possible proposal is developed and submitted. Some basic tips for improving budget justifications include:

  • Justification is key. The document must go beyond repeating formulas and explain why an expense is necessary to the program.
  • Keep a written record of how all figures were determined -- write down formulas, research sources, etc. to ensure the justification has accurate information.
  • Use standard agency information whenever possible -- salary scales, Cost Per Employee formulas, etc. to provide consistency. Develop standard language explaining how each was developed and why.
  • Keep copies of effective budget justifications and refer to them for successful language.
  • Ask staff and volunteers to proofread the justification multiple times. Anything they question will have the same effect on the reviewer.
  • Provide a brief statement of how the expense impacts the project to tie the justification to the program’s outcomes.
  • Review the justification against the full proposal -- look for instances where information may seem inconsistent and clarify both documents. This is particularly important if different people write each piece.
  • If two different people write the proposal and the budget justification, the grant proposal writer should edit the document to ensure consistency in language and feel.
  • Be consistent in how figures are presented and explained. If telephone expenses are based on monthly costs, other operating expenses should be presented as monthly, as well.

 

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