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Due: Mar. 21, 1998

Overview. Using the action plan and resources you have identified as needed for your project, please develop a budget showing all the cost categories and your best estimate of the actual costs involved.

Background Information. Miner & Griffith say a budget "is an alternative way of expressing your project." In fact, it should be possible to look at a proposal budget without reading the narrative and have a good sense of what the project is about, what its objectives are, how it will be carried out, evaluated and how and who will be told about it. Keep this picture in mind as you prepare your budget.

Budget items are often divided into Direct Costs and Indirect Costs. Direct costs are expenditures with a designated purpose -- salaries, equipment, books, travel, supplies, postage, telephone, and the like. They are specific and concrete. Indirect costs are those that are difficult to break down individually but are necessary to performing the project. Examples of indirect costs may be items like heat and lighting, building upkeep, maintenance, payroll personnel. Sometimes upper level administration is considered an indirect cost as well. Indirect costs are usually expressed as a percentage of the total amount of the project (or sometimes a percentage of only the personnel costs or of all the costs except equipment).

Cost sharing. Many grant funders require project costs to be shared. If this is the case, estimates of the amount contributed by the organization toward the project need to be specified. Shared costs may be "in-kind", that is costs that do not require a cash outlay, but would cost real dollars if not provided (Miner & Griffith use the example of the value of time contributed by volunteers). Cost shared items may include use of space and equipment, contributed time of paid staff, as well as other direct cost items.

Budget Categories. Use the following categories when developing your budget (Some of these categories may not apply to your project and you may need to add others, but use the list as a guideline:

1. Personnel
   • Salaries and wages
   • Fringe benefits
   • Consultants/Honoraria
2. Space and facilities
   • Rental/purchase/renovation
   • Utilities and maintenance costs
   • Overhead charges (Indirect cost)
3. Equipment (specifications and justification required)
   • Purchase or Rental
   • Contract costs (computer time, online searching, communication)
   • Software
   • Maintenance contract
4. Travel (project staff and/or consultants)
   • Transportation (or mileage)
   • Per Diem
5. Materials
   • Office supplies
   • Special materials
6. Communication
   • Postage
   • Telephone/ Fax
   • Printing and duplicating
   • Artwork/graphics
7. Other

Note: The last assignment will be a dissemination and evaluation plan. There will be expenses connected to these two functions. the costs attached to these activities will have to be calculated and added to the budget later.

Some Helpful Tips. A sample budget is shown on p. 114 of Miner & Griffith. It shows three columns. Only one column is necessary for this assignment. If an expense item in your budget is to be contributed by your organization, show the expense item and write "contributed" in the wolumn where otherwise you would show a dollar amount.

Here are a few useful estimation techniques and reminders.

1. For each of the items on your budget show the calculations so we can understand how you derived the figure. Ex. Travel (100 miles per month @.31/mile x 12 months = $372).

2. Figure an average of $300 per year per key project staff member for supplies. Use a proportional amount if the staff person is not full time or not for a full year.

3. If it is difficult to get the true fringe benefit rate from your institution, use an estimated 25%. It will be close.

4. Remember to include, if applicable, budget support for service and maintenance contracts (about 10% of total cost of equipment), insurance, installation of equipment, legal services, training costs, and the like. Try to think through all contingencies and make reasonable estimates.

5. Number the budget category items. Attach a justification sheet (budget narrative) with an explanation, if needed for those items that seem to require additional explanation.

6. If your project is for seed money or is a pilot project, the expectation is that after the project is started ongoing costs will be less and continuation money will be supplied elsewhere. If this is the case for your project, please add a financing plan for future funding following the budget justification. Your plan may be as simple as a statement that your organization agrees to pick up ongoing costs if the project demonstrates success in its first year. Or it can include a combination of user fees, sales of publications, (look at our National Parks for an example of this kind of cost recovery), and/or plans to approach other granting agencies.

Format for Budget Your final budget document should be in two or three parts: (1) a numbered list of cost categories and associated amounts, (2) a budget narrative containing further justification for any cost category that is not self-explanatory, and (3) a future funding plan, if pertinent to your project.

Final copy should be a web document on WebCT, pleasingly formatted. Make sure to include your project title, the section title, the names of all members of your group, and the date of your draft document.

©: Evelyn Daniel, 1998. All rights reserved.
Page revised 3/1/98.