Your Program Budget Is A Storytelling Tool
When putting together a proposal for funding, you’re thinking about all the elements that work together to tell the story of your organization or program and the impact that it makes on your community. You’re crafting the right language to describe your goals, finding illuminating quotes, organizing descriptive photos and videos—but are you thinking about how to best format your budget?
When submitting a program budget or multi-year projection to a prospective funder, there’s LOTS to consider in terms of how you are presenting the information about your anticipated costs and revenue.
Here are a few issues to think through in determining how your budget can help tell the story of your program:
Does your budget balance? If you’re committed to executing your program, whether or not you receive a gift from this funder, then you’ll likely be covering part of your costs with an allocation of general operating funds. The question to consider is whether to include that amount under income or to show a deficit so that the funder can see what you still need to raise to cover the program. If including the general operating funds in your income, it’s important to label it clearly, so the funder doesn’t think that the program is already fully funded. If choosing to show a deficit, you might call that line “Surplus/(Deficit) Prior to Additional Fundraising.” You might also include a line at the bottom with your request to the funder to demonstrate how their gift will offset that deficit. Both options are acceptable, the question is which story is going to be the most effective, based on what you know about your nonprofit’s financial situation and what you know about your funder—the story in which the organization will find a way to pay for the program either way, or the one in which you need that funder’s support to make the work happen?
How detailed are your expense line items? Depending on what your expenses are, the labels on your line items can tell an important story about how your program is structured. If you run an education program, for instance, consider separating out fees to facilitators, or teaching artists from the rest of your salaries. In that same instance, maybe books and instructional tools should be separated out from standard “supplies.”
Which indirect costs do you include? We all know that even though your electric bill is not a direct cost of your program, you cannot make your program happen without at some point using electricity. The same of course goes for rent, staff salaries, and some forms of insurance. When presenting a budget to a funder, there are great reasons to leave allocations for these costs in, and also great reasons to take them out. It is important to know your funder and their guidelines when making the decision regarding which indirect (or overhead) expenses to include in a budget. That said, sometimes there is a possible middle ground: include ALL your expenses and notate which lines would be supported by the funder’s gift. This allows you to demonstrate the full scope of your nonprofit’s financial commitment to your program, while also assuring the funder that their gift won’t pay for any specific costs they don’t want to support.
How are you notating the document? The final format and composition of your budget is the culmination of many decisions regarding your work and the story that you want to tell about it. While it may be tempting to let the numbers speak for themselves (and sometimes they really do), don’t leave anything up for interpretation by the reader. Depending on the nature of your budget, it may need a paragraph-long note at the bottom, telling one cohesive story about why your numbers are the way they are. Alternately, if there are several little stories to tell, you might need footnotes, or notes that are written next to each line item on the page. In order to determine which way to go, it may be helpful to show your budget to a colleague who can look at it with fresh eyes, and determine where they have questions, comments, and concerns.
Even when the CFO, finance department, or program staff members are the people in your organization responsible for creating the budgets, don’t forget that you, as a fundraiser, can have a voice in adjusting them for funding requests. Consider the questions above and bring them up for discussion as you work with your team to come to an agreement about how to put your best budgetary foot forward.