Part Four: Budget and Budget Narrative
Download MP3Welcome to this podcast that is all about funding. From grants to crowdfunding, we will be talking with nonprofits, foundation representatives, federal consultants, passionate community members, and so forth from every angle
Holly Rustick:of the funding community to see how they can
Holly Rustick:get funded, what their challenges are, and what questions they have on securing funding. I will be answering questions and providing tips and advice on how to best move forward in securing funding for your research, or business. My name is Holly Rustic, and I am creator of WeGo Consulting. That's writing, editing, grants, and organizational development. You can find me at www.wegogrants.com or www.hollyrustic.com, where you can also sign up and get free grant templates and get access to grant writing books and courses.
Holly Rustick:As a grant writer for more than a decade, having managed grants for various organizations around the world, securing millions and millions of dollars for organizations, and being a federal reviewer, I have seen every side of the coin for funding. I'm excited to share information and try my best to answer any questions so you can increase your funding and organization to impact your community and the world at large. So let's get started because money can be groovy. It's time to talk about the money. Alright, we have finally reached the budget in our series here, our five part series of how to write a winning grant and we are on section four, the budget.
Holly Rustick:And some of you might ask me why are you doing this before you actually even talk about the design of the project? And the reason is is because you really kind of need to at least get a rough draft of the budget figured out before you really go into all the details of your design, or at least that's the way that I have found that works the best for me. And just getting your team all on board in that pre grant meeting that we had discussed in a previous podcast, because it's really important to to break it down. What's the budget? What are the objectives?
Holly Rustick:And what's their timeline? And from there, the design flows a little bit easier. So the budget is something we really need to look at. I know a lot of people run screaming for the hills when you mention budget, especially people who are, you know, maybe want to do the program narrative a little bit more because they're more they feel like they're more of a words person and they're not a CPA or a bookkeeper, so they have no idea when it comes to budgets. The good thing is you don't have to be a CPA to do a budget, but you do have to understand what categories are included in budgets and how to do the budget narrative.
Holly Rustick:So there is definitely a marriage between this part. And this is oftentimes the weakest section of grant applications, perhaps because it's usually one of the last items listed in the FOA opportunity announcement or the request for proposal. So this is often the last part that is listed so after you've gone through your needs and you've gone through your objectives and goals and your design and your letters and blah blah blah and then finally get to the budget At this point in time your deadline might not be, you know, it might be really tight and creep it up on you. So a lot of times as a reviewer, I go through grants and I can see that the budget maybe was one of the last sections that was written and it was just kind of thrown together and it doesn't make sense or mesh with the rest of the project. You should definitely write this section in alignment with the objectives and timeline.
Holly Rustick:If you have an activity in the timeline, then you should see if it should be included in the budget. This way you keep the entire design extremely clear and the project will have the needed money to implement the activities. Now this is the real reason here, so if you're looking at a budget and it doesn't make sense to the project design and the rest of the grant application, then you're wondering can those elements actually be implemented if there's not funding for it? So you see how that kind of makes sense. So always think of the project and the budget as a healthy marriage.
Holly Rustick:Many grant writers will use the excuse that they're literary savvy but aren't good with numbers while fiscal agents will say vice versa. However you need to be good at both words and numbers as a grant writer. You'll have to turn the nerds you'll have to turn the numbers into words within your budget narrative justification. So in this podcast you will learn how to write a consistent budget and budget narrative in the format that grant reviewers appreciate. Ah, very good to appreciate that because they will also probably score higher.
Holly Rustick:You will know which category to put each item of your budget and how to calculate costs. You will also get links to resources to help you put a reliable cost on each item. Now you can't just grab numbers out of the sky for a lot of this, it really has to make sense. The good news is that you don't have to, like I said, you don't have to be a CPA to write a budget. You do however need to understand budgets.
Holly Rustick:I've picked on small nonprofits a lot but now it's time to reverse roles. This is where smaller nonprofits often thrive. Why? Well, a lot of times project managers have to understand budgets because they may not there may not be a full time bookkeeper or finance division. Larger organizations will have an entirely separately financial division or they may and usually they do and while this is great and essential it can also hinder the philosophy of viewing a grant in its totality.
Holly Rustick:Larger organizations will have programmatic division and finance divisions which are not always involved when it comes to the design of grants because this is assumed to be more programmatic. I urge you no matter what the size of your organization that both sides of the coin sit at the table during the grant design planning stage of writing the objective timeline and budget. Don't segregate this process. You need everybody on the same page, okay? That lead grant writer like we had discussed before, they need to come in and understand both the budget and the program.
Holly Rustick:So the following I'm going to give you is an outline of the main budget categories. Think of these categories as the main framework for your budget. These will be the main categories that I use in all templates. So if you go to my website hollyrustic.com/grantbonus, then you will go ahead and you will see, you'll be able to get a a downloadable Excel workable template that has all of these listed. So there's no need to memorize this or jot it down because that is available for you.
Holly Rustick:But basically the budget categories personnel, fringe benefits, travel, contracts, consultants, equipment, supplies, other, indirect program income. All right, so that's basically what you're going to see on all federal grants. You're to see that in the SF-four 24, you're going to be seeing these different different categories. So I just urge you to kind of use the same thing whether you're writing to a foundation for a grant or to, you know, a federal because federal is going to require this. So you kind of want to just go with federal because eventually if you're not getting federal funds right now, you want to be getting federal funds at some point.
Holly Rustick:So that's very good just to kind of be consistent already in your QuickBooks or your accounting software to have these categories. Okay, so just like your objectives need to be smart, so does your budget. Remember what that means specific, measurable, achievable, relevant, and time bound. So I really kind of like to look at this at the budget as well as being smart, not just the objectives because then it really makes sense. So specific, don't fall into a trap and use the word miscellaneous for a budget subcategory.
Holly Rustick:Be specific when listing all your subcategories. So those subcategories fall underneath the main categories. So for an example, a full time employee project director would fall under personnel, Right? That would be a subcategory of personnel. So measurable.
Holly Rustick:If you utilize a budget template, on my website and you're also the new book that I'm releasing has all these templates included in it as well. So you can definitely check that out. But if you use a budget template, then you will be able to adhere to measuring your budget appropriately. This is under the computation column of the budget. So for example, FTE, it means full time employee.
Holly Rustick:In the little subcategory full time employee project director, in the computation cell you would put a full time FTE project director at two thousand and eighty hours and that just means that's forty hours that they worked full time for fifty two weeks of the year, so a full time job. Two thousand and eighty hours times let's say $25 an hour equals 52,000. So you put that actual little computation, just explanation within the cell, and then you would have in another cell 52,000 where all your numbers, just numbers no words, are at. So it's very clear how you actually came to fifty two thousand or whatever that amount is that you're going to pay them for. That can fluctuate and we're going to look at that in a second.
Holly Rustick:So the next thing of course in SMART is achievable. So you want to ensure that your budget items are achievable. Your budget needs to make sense, right? So is there any or is there enough work for your project director to be hired at a full time basis? So if we go back to our example of Youth Soccer Rocks and that was basically we're looking at a non profit who's developing a soccer program for disadvantaged youth in the city of Rockin' Sox.
Holly Rustick:Yes, this is all fictionalized, but anyways that's kind of our example through this whole series. So if this particular and they want to develop, we're looking at 100 scholarships for disadvantaged youth for the year so they can take part in tennis or tennis soccer area soccer clinics and have some areas of support in nutrition and that sort of thing. If you have a full time project director, do you have enough work? So if you only offer one summer camp a year for two weeks, two thousand and eighty hours of full time, is that really achievable? Is there enough work to keep them busy?
Holly Rustick:On the flip side, do you have ample resources included in your budget to meet the objectives? If there is a required training for two staff to attend a three day training in Washington DC from your funding source, and note a lot of federal grants require this, that you actually budget in your budget money so you can attend their trainings. So but say your organization is based in California, would you only include a $100 for the training in the budget? No. Alright, you wouldn't because that's not enough money to get two people out to DC from California, or at least not in 2017 right now.
Holly Rustick:It's not. So you would definitely have to meet different, and we're going to talk about that, where you can go and find estimates so you would know what cost to include in there. Okay, so is it relevant? If you put your timeline next to your budget to ensure that each item is accounted for then your budget should be relevant. Alright, so remember going back to the action plan timeline.
Holly Rustick:You have a timeline to say for instance you're going to be hiring a project director on your timeline and you discuss the project directors in your project design, then it would be relevant to include a project director in your budget. On the other hand, if you did not include the project director in your timeline or project design, then it would not be completely relevant to include it in your budget. You see how this is where if you don't have that nice little healthy marriage it's gonna get all off. So if you can say we're gonna hire a full time director of 52,000 in our budget, you never mention them in your design, you never mention them anywhere else in the grant, then it doesn't really make sense and it's not relevant. All right, so let's get to the T in SMART.
Holly Rustick:Time bound. So usually your budget is usually listed year by year or before a certain duration. So if you are applying for a federal grant and it is a three year grant, they're to want to see the budget broken down year by year. So they're not going to want to just see a full three year view of one, so you're not going to say 52,000 times three all in one document. They're going to want to see it year by year, 52,000 per year, or you might increase that a little bit.
Holly Rustick:We're going talk about that. But if you break down your personnel computations on an annual basis, but then clump all your renter supplies into three years, it's going to be super confusing. So you need to break it down year by year for every single category. So you will have three separate budgets for a three year grant. Now if it's a one year grant, you're gonna have a one year project and that's it.
Holly Rustick:That's fine. But looking at multi year grants, you need to make sure you break it down. Some grant periods are less than a year and only for a specific season, and that's fine too, but it's just important to pay attention to what duration it is and when the grant will be awarded. That way you can be more specific with scheduling the grant so it makes sense. So for instance, if this particular grant may be from a foundation that said they're going to be awarding and it's only going to be from October until April, I'm just kind of throwing this out there, that's not really common, but you might run across that, then you were not gonna pay for your summer camp in July with that funding you're gonna have to figure out how to do a winter season clinic or something like that.
Holly Rustick:So you just have to kind of pay attention to when grant budgets are. Okay. So let's go ahead and let's break the whole thing down with all those categories. Alright. So what I'm going to do, and I know this podcast is probably going to run a little bit longer than my usual ones that are about fifteen minutes, it's definitely going to run a little bit longer, but that's because there's a lot of information and I want you to understand it.
Holly Rustick:And I what I'm going to do though is provide for each category an example, and then I'm going to also give you an example for the budget narrative. That way you can see what you're going to actually put in your line by line budget and then in your budget narrative justification, so how you're actually going to explain it with words. Alright, so let's go through the categories. We're going to start out with personnel. Usually you need to contact the accounting department for this information.
Holly Rustick:So take note in the case of a multi year grant, many organizations have automatic percentage increases each year for their employees. If not, it is still a good practice to allow for inflation and give a small percentage increase for most items each year. Alright, so that's what I talked about before. You know, that 52,000 might increase slightly. They might have a 3% increase every year according to your, I guess that would be human resources policies and procedures.
Holly Rustick:So you need to really, or your fiscal policies and procedures, or it could be a combination. But anyways, you need to figure out what that is if you have one. And if you don't, need to start thinking about that because if you really think about it people kind of do generally want to have a little bit of a raise each year right if they're doing a lot of work and that sort of thing and prices do go up so it is a good practice to have that in your organization otherwise it's kind of hard when you have people coming in a few years later and want a higher wage but you haven't been increasing the employees that you already retain. So there's, there can be of conflict there but you can go ahead and look at that. So what you want to do with the personnel section is to include the staff that will be working on the grant project.
Holly Rustick:This may include positions that have not yet been hired and that's fine. Just make sure you include updated resumes and job descriptions for all the personnel that you will hire as employees for the grant project. If you will be hiring a completely new position then make sure you include a new job description for this position. See once again how it's all meshing together. I'll make this lovely puzzle.
Holly Rustick:Alright, so how much should the wages be? This is a grant so you can just jack up all your salaries at any amount. Right? It's free money. Wrong.
Holly Rustick:We've already gone over this. Okay. Be careful here. The best practice is to use the policies you already have in place for at your organization. So case managers at level one might get a certain amount and that's already written into what you have as far as your staffing.
Holly Rustick:And you would just be hiring for different positions that are already included in that staffing. Or if you don't have that yet and this is completely new, going be completely new positions, then it's best practices to really go to the department of labor's wage and hour determination. You can definitely check that out on www.dol.gov/whd for wage and hour division, so you can definitely check that out for more information and I'll put that on my blog too. So if you want to check that out at hollyrustic.com or wegogrants.com. I'll have these links there.
Holly Rustick:But you'll, you can look for your specific state. So they'll have a bunch of different job roles and titles and then what the wages are at. And so you can kind of like compare that. All job titles will not be included in these databases, but you can use a job that has similar education or training qualifications. If you do increase an employee salary in a drastic way, specifically the executive director, make sure this is done by a vote from the board of directors before the wages changed.
Holly Rustick:So just make sure you have that all there and included. And sometimes even for your volunteers, this is where you're going to get how much you can put as in kind to support your volunteers. Like if you have a PhD volunteer that is providing curriculum support to develop curriculum and they're actually doing their job role to help you out, but they're not charging, then charge what they would actually charge to do that and that can be quite a high amount as in kind even. So really kind of look at that for all of your different roles but once again don't just pull any amount wage from the sky just make sure you can back it up with documentation include those resumes so and the job description so the reviewers are sure that that position is really should get paid that amount and vice versa don't go too low where you're not going to be able to find anyone that has the qualifications you're asking for to fill that position. Alright.
Holly Rustick:So for the budget narrative part, an example could be for the executive director. Okay. So youth soccer rocks will allocate 30% of the executive director's time towards this project at $35 per hour for two thousand eighty hours totaling $21,840. The executive director will oversee and compile reports and supervise the project manager, coach, and bookkeeper. Once again there you're only taking a certain percentage of the executive director's time because they don't need to be fully committed to this project, you have a full time project director already.
Holly Rustick:So it's a really good practice if you're going to have an executive director put some of their time is to just take a percentage of their time because they're usually overseeing all the projects. So it's definitely okay to take percentage and break it apart across the programs. Sometimes people even include the executive director salary in the indirect cost rate and that's fine too. So just make sure that you follow whatever your organization does but that's just an example. So see it was just very clear it's kind of like the computation but there's just a little bit more wording there it's just a little bit more clear there's some more justification what they're actually going to be doing and you just really want to list that up that's basically your budget narrative.
Holly Rustick:All right so now let's look at fringe benefits. Fringe benefits is the second category. Fringe benefits vary from organization to organization except for FICA right, so federal insurance contributions act rate which is made up of two items social security and Medicare taxes. For 2017 the social security tax rate is 6.2% on the first 127,200 wages paid. The Medicare taxes at 1.45% on the first $200,000 and 2.35% above $200,000 All right most of the time the FICO rate you're going use is 7.65% although this can change so make sure you stay up to date on the FICO rate.
Holly Rustick:All of their fringe benefits vary from state to state and from organization to organization. A cautionary note is for you to make sure you are following your contract and grant requirements. For instance, some state contracts may require that you include health and welfare for your employees and they include a specific rate. Read your contracts and make sure you incorporate all requirements, all right, because that can really make a huge difference too on what the fringe benefits will be. So the project narrative then example is FICA and this is very simple okay the FICA rate is at 7.65% for 5887.44 for grant requested salaries and $856.8 for non federal personnel salaries totaling $6,744.24 Now notice I'm also including my non federal in the budget narrative.
Holly Rustick:You need to do that and some people like to separate it and some federal agencies like it separated too. They want to see first all the justification done just for the federal side and then they want to see it done for the non federal. So make sure you're reading, you know, what the agencies require. But basically you do want to have both. So even when you look at the non federal you have to break it down, remember that.
Holly Rustick:Let's move on to travel. Travel will be divided into actual travel for conferences and trips and for general around town types of travel. For example, Yousaka Rocks will have one grant required training to attend in Washington DC, which the project director and accountant will attend. They will also include gas mileage for using the minivan to transport kids to soccer games. Make sure you include any required travel in your grants.
Holly Rustick:Like I said before, if you have to go, make sure you read that and implement into the project to make sure you have the right amount. Also if you state that your staff will attend other regional trainings and conferences then include it in your budget and in your timeline remember to put that in your timeline too. Even your annual required trainings to go to the different federal agencies, you need to put that in your timeline. All right, so traveling to conferences and trainings needs to be specific. You will often get scored on how specific this is if you don't break it You will need to include the cost of lodging, flights or trains if necessary, rental cars if necessary, and per diem.
Holly Rustick:So don't try to put all these, once again don't pull them out of the air. You can easily visit www.gsa.gov to get the meals and incidental rates and lodging for virtual every city in The United States. Alright. One note is that meals and incidentals are at 75% of total daily costs when traveling to and from the destination. For example, if you flew out of from California on a Monday to Washington DC and the conference started on Tuesday, you would get 75% of the total meals and incidental costs for the days you were traveling.
Holly Rustick:So you don't get a 100% that day. Who knows, they might actually ended up changing it. It used to be national flights provided food but now you have to pay for it. So I don't know but anyways that's how it is for now. So just make sure you have you know you're aware of that and then for general driving costs you include the so you're around the town kind of thing you can include oh just one more note on that gsa.gov site that's where your lodging is going to be too so you would just put in your state that you're going to be, you know, the training and it'll have even have like geographic regions within the states or cities and then you can go ahead and you can put in, you can actually see how much the rate is provided and you would use that rate.
Holly Rustick:So if it's 177 per night in for, Washington DC, that's what you would put per night, and they're just kind of averaging out different prices in the area. Although that doesn't seem like a lot but but then you can go ahead and see how much your meals would be for the day too and what your just your per diem, your incidentals, that sort of thing. But when traveling just use 75% of that. Obviously, you can't charge for overnight because you're you're flying. Usually, you're not flying.
Holly Rustick:I mean sometimes you're getting a red eye but you're not paying for a hotel that night, you're paying for your flight. All right, so for general driving costs around town you can include the IRS standard mileage rates. Once again this is already predetermined for you. This can change from year to year again, so make sure that you take a look at this every year to find out if the rate has changed. All right, so just see how often gas prices fluctuate.
Holly Rustick:This will change. This rate does seem to vary year to year and federal grants will usually only approve the maximum amount is included in this rate. The 2017 rate as of July 2017 is $53.05 cents per mile, so basically a little bit more than a half a dollar. Visit the IRS website for updated information. You can find this at www.irs.gov/uac/2017 standard mileage rates for business and medical and moving announce.
Holly Rustick:Once again, please check out my website and you can get the links directly. Hollyrustic.com, legogramps.com and I will have the podcast listed and I also have a blog where I just have some information including these links. Alright so the budget narrative required training, so I would put something like this for this part in particular. Required training. Youth soccer rocks will have the project manager and bookkeeper attend the required conference in Washington DC.
Holly Rustick:The current airfare price from soccer rocks state to Washington DC is $500 round trip. Therefore, we have two people taking round trip flights at $1,000 in total. Lodging based on the GSA estimates will be $182 per night for two people totaling $1,092. Meals and incidentals based on current GSA estimates will be $69 per day for three days for two people, plus $51.75 for two days of traveling total, totaling $621. All required training costs will be grant requested at $2,000.713.
Holly Rustick:That's pretty much it. You know, you're just breaking it all down, but you're kind of listing it. I use these rates. They're based on this. You can even include a copy of the quote that you printed out.
Holly Rustick:Go to GSA when you find that information and just print it out or, you know, save it as a PDF and then include it as an attachment if you have some space. That's always really good to include. Moving on, equipment. This category can be a little confusing as a lot of organizations want to include computers and cell phones under this category. That might work for a foundation grant but if you're considering federal grants then adhere to the federal requirements.
Holly Rustick:All right, let's get nerdy here. According to guidelines in the code of federal regulations, equipment is defined as tangible personal property having a useful life of more than one year and a per unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non federal entity for financial statement purposes or $5,000. End quote. That is two CFR200.33, that's where that's from. Okay, so basically what it's saying is in layman's terms that any item, not separate items that were surpassed 5,000 when combined, but a singular item that will be $5,000 or more and has a lifespan of more than one year is considered equipment.
Holly Rustick:I would suggest listing at least three quotes to show you're getting the best deal on the equipment when you have something over $5,000 This could be a vehicle, but watch out. A lot of times vehicles aren't eligible, alright, to include in the budget. But it could be something, say a food truck and you need a certain kind of equipment in that food truck and that cost $25,000 and had a life it lasted more than a year. You would include that here and you would definitely include three quotes to show that you're getting the best price. So that's basically equipment.
Holly Rustick:So let's look at the the narrative. All right for this grant we're going say a minivan. Youth soccer rocks request the purchase of a seven seater minivan at $20,000. The minivan is essential for driving our youth to soccer games, practices, and related activities. See three quotes of minivans to ensure the most economical cost for the minivan totaling $20,000.
Holly Rustick:Boom! That's all you got to say. You got to include those quotes and of course you have to include the purchase of this in your activity timeline and in your narrative. Like to really show the need, there's a need, maybe the public transportation isn't adequate in your area, something like that. Know you have to also show the need for that transportation.
Holly Rustick:So you're just linking this all together. Okay, so that's equipment. So moving on to supplies. Supplies are where a lot of your items may be listed. This is basically what it sounds like, what supplies will your project need.
Holly Rustick:This can include consumables such as paper, printing costs, staples, and so forth. It can also include pamphlets and other types of costs. Budget narrative example is consumables. We use that as a subcategory consumables. Youth rocker socks request $600 per year from the grant and will provide a non federal match of $600 per year from rocking socks foundation.
Holly Rustick:Consumables include paper, staples, ink, cleaning supplies, and clipboards. Consumables total $1,200 per year. Alright. So we're gonna have half of that they're asking for the grant of $600 and the other half they've already gotten from a non federal foundation grant. So they might want to even include a copy of that awarded contract or the awarded grant from that foundation to show that they have that already and that's how much that cost.
Holly Rustick:So once again notice they didn't say consumables include miscellaneous supplies. Broken down paper, staples, ink, cleaning supplies, clip ports. Alright, you're going to really break it down. Alright so let's go ahead and go on to consult a contractual. Okay so contractual refers to the types of services or items that need different sources or that different sources are performing.
Holly Rustick:This can be where you can hire out, contract out an accounting agency to do your bookkeeping. If you actually contract this work out you would not include the agency as an employee in the personnel category because you are not paying their fringe benefits and they are not an employee. So it's basically those people who are doing services or creating products for you that are not employees. The example we'll use in that youth rocker socks will hire a contractor to perform two months of advertising for their soccer program to recruit participants. Because Youth Soccer Rocks has a formal contract with the advertising agency, we would include this under contractual.
Holly Rustick:So the budget narrative would be that the subcategory would be advertising and then you would say, Youth Soccer Rocks will hire an advertising contractor to create public awareness and advertisements on the television and radio for two months to help with recruiting and outreach at $1,000 for each month totaling $2,000 So very simple right, you're just breaking it down once again and then you would include that contract if you already have it already or once again how many quotes? Three! Yeah and even though this isn't $5,000 I would still go ahead and include some kind of quote at least just even from the agency itself if you're not even going to compare them to anyone else because it could be either way you could be under bidding and they're not able to actually implement you know that into the grant again maybe you would be able to do all the advertising that you needed in the outreach because you don't have enough money in your budget to do it. Or the opposite, you could be putting way too much in there and then you'd have to figure out how to wiggle around the rest. So it's just better practice to at least have the one when you're dealing with contractors and consultants to at least have that agreement or an estimate from that person or that organization.
Holly Rustick:Moving on to other. The other category is basically where you put any other anticipated expenses. I'm including computers within this category, although those can also be included within supplies. If you can tell by now there are certain black and white items in a budget while others are a little gray. Alright this is where we would identify any items that wouldn't be classified in any other category.
Holly Rustick:But you'll also want to work with your finance division to know under what categories they allocate items. That way it will be clear across all your grant programs and I would say follow federal guidelines as well, like if you work a lot with a certain federal grant follow what they do, what they're asking you know that way you can be clear across your programs and kind of fit in better. So for this example we're using computers as an other subcategory. Youth soccer rocks will purchase two computers one for the project manager one for the bookkeeper to complete all programmatic and financial reports. The computers will be $1,000 each totaling $2,000 I mean if you want you can go ahead and print off that quote where you found that and include it.
Holly Rustick:Alright, that's always a good practice to include in your attachment. All right, another example under other, I'm just going give you a few under this one, because usually you will end up putting a lot under this category. Another subcategory would be the venue for nutrition. Youth soccer rocks high school provide a space of 150 square feet valued at $100 per hour for a total of ten hours to discuss nutrition health. The use of this space totals $1,500.
Holly Rustick:There you go, you're including your non federal descriptions too. The Internet, another subcategory. The Internet will be required for all reports, social media post, and administration. Internet cost is $100 per month for twelve months totaling $1,200. We will request $600 from the grant and $600 will be covered by a non federal foundation grant.
Holly Rustick:So again you are describing everything where everything's coming from what you're going to need. Alright, so moving on to indirect cost category. If you have an indirect cost rate, you know exactly what I'm talking about. If you don't know what I'm talking about, you probably don't have one. But anyways, if you have an indirect cost rate then include what it is.
Holly Rustick:If you do not have an indirect cost rate, I highly recommend that you include the allowed de minimis indirect cost rate of 10 Yes, rocking. We can now do that without going into negotiations. You can go into negotiations for a higher amount for an indirect cost rate, but this is a grueling annual process. Plus if you have a higher indirect cost rate, what does that mean? Alright.
Holly Rustick:So the indirect cost rate, basically this is what it means. First thing you put on your budget, if you're asking for a $100,000, if that's how much the ceiling is for a grant, automatically $10,000 goes into the indirect cost rate. And you already have, when you go into negotiations, you figure out what that indirect cost rate will cover. Like I said, sometimes that will include your executive director salary, it could cover utilities, it could cover rent, whatever you've already negotiated. Now the same thing for de minimis, already have to outline what you're going to use an indirect cost rate for.
Holly Rustick:So that 10%. So if you don't have, if you did go in for a higher, you know, indirect cost rate and I see this a lot with universities, they're like huge, okay, like 60%. So I've seen this. I mean that's 60% of your budget gone to indirect, okay? And you only have 40% to work with direct services that you're going to be asking for in the grant.
Holly Rustick:Basically 10% is pretty good because it kind of allows for a buffer of you've already identified some things that can be included under there so you don't have to categorize them all. But that means it will take away from your project direct budget cost. Alright? The 10% is not too much to come off the top and it can help provide support for other costs which may not be included. It is direct cost.
Holly Rustick:Alright? So these costs may include, like I said, executive administrative salaries, rent, utilities, and other costs are more overhead appropriate. So for our example, for the subcategory indirect cost, youth soccer rocks will include a de minimis 10% indirect cost rate that will cover the cost of utilities, legal fees, insurance, and insurance. Boom, that's it. Alright, so not a lot but they have something in there.
Holly Rustick:And that can even include your audits and stuff like that, so it's pretty cool. That's a breakdown of your different categories for your budget and also gives you an example different ways of how to word your budget justification narratives. Alright, so in this podcast you learned how to write a consistent budget and budget narrative in the format that grant reviewers appreciate. You now know which category to put each item of your budget and how to calculate costs. You also have the links to resources to help put a reliable cost on each item.
Holly Rustick:Alright, if the grant is for more than one year make sure you add in subsequent years. Also be sure you include any non federal matching, if it is required and letters of commitment, leases, that can be a lease can be a great thing just to show why you're asking for so much money for rent because right there boom it's proven that's how much I need. Memorandums of understanding and other required contracts to demonstrate commitment. If you're requesting for an item worth more than 5,000, what do you do? Include at least three quotations to demonstrate the cost of the request and to show cost efficiency.
Holly Rustick:Otherwise, you could just maybe be hiring your friend or a board director, oh, that's a company. Just give them a kickback. All right, that's why they want to make sure these things are clear and it really does make sense if you're looking at it from the funders perspective as well. Okay, they want to make sure the money that is going to be used in the most cost efficient way and it's going to serve the most people or make the largest impact on your community. Alright, guys.
Holly Rustick:And once again, go ahead and go to www.hollyrustic. That's hollyrustick.com forward slash grant bonus to get your copies of your free templates that are workable. These are all Word or Excel that you can completely manipulate and work with and use again and again. So get your budget there. It's in an Excel format so you can go ahead and use it right away.
Holly Rustick:And, yeah, I'm just I'm excited to hear from all of you. I know I've been getting a lot of emails. I've been getting a lot of Facebook messages, and I'm just really excited that people are reaching out and asking questions. I'm doing my best to answer everyone's questions and just to help out, and to give you guys the best information and resources so you can get funding for your community, for your dreams, and really impact the world at large. So you guys are rocking out.
Holly Rustick:I'm super happy that you guys are listening, and I hope this is helping. Send me an email, a Facebook message, and let me know what other things you're interested in listening to. I have a guest coming up in September. Super excited. He is like a guru in The States of a grant writer, and we're gonna be picking his brain so he can help you guys out with his experience and his expertise.
Holly Rustick:So once again, yeah, shoot me an email if you wanna hear about anything specific. Our next podcast is the last in the five part series, and we're finally gonna be getting to the project design, actually, the whole approach. So, yes, that's where we're gonna be next week. So or next in the next two weeks. So check it out.
Holly Rustick:Stay in go ahead and follow me so you can get these or sign up for your grant bonuses, and I will also send you emails when the next podcasts are released and also giving you discounts. Oh, yes. You're gonna get a discount to my new book. Alright. So I'll talk to you guys soon, and go get funded.
