The Budget

Assessing the proposal's budget is far more an art than a science. There is no set standard as to how expensive any project should be, and costs do vary from place to place. There are, however, a few useful assessment methods. The first is to check the budget against the proposal's narrative. If the proposal says that the lion's share of the project's resources will be concentrated on providing mentors for impoverished youth, then the preponderance of spending should come out of the Mentoring line item. If the line item for buying computers is by far the largest, there is a problem: both of these propositions cannot simultaneously be true.

The second method is to follow the doctrine of proportionality. Although costs will vary from project to project for many reasons, they usually vary within a predictable range. If, for example, one proposal budgets personnel costs at three times higher than those of roughly comparable projects, the disproportionately expensive budget should, to say the least, excite some concern on your part.

The third method is to seek clarity. Are the line items clearly labeled, or are they so vague that they could be interpreted in virtually any way? A line item called Meeting Costs is clear enough, but what about line items labeled Capital Expenditures or Expense Recovery, or that perennial favorite, Miscellaneous? You will need to ask the applicant for clarification before you can recommend such a proposal for funding.

You need to be ever watchful for line items that your foundation does not allow (such as for endowment or general operating support), and especially for line items that have been padded. Some long-suffering applicants, who have repeatedly endured grantmakers arbitrarily cutting their line-item requests, routinely budget for more than they need, with the expectation that their request will be cut back at some point during the process. This is a no-lose proposition for the grantseeker, because if the request is cut, they will still get about what they need, and if it is not cut, they will get a windfall. Of course, mistakes can be made in the other direction; sometimes applicants estimate too low. They frequently do so with the line items for meetings and transportation. In such cases, you should not hesitate to suggest increasing the amounts for such anemic line items.

You will need to be vigilant for line items that should appear in the budget but do not. Applicants sometimes omit activities that would enhance the outcomes of a project; they do so perhaps in an effort to save money or possibly because they are unaware of them. Examples include specialized training for project staff, technical assistance, dissemination, evaluation, and policy education. Again, you should not hesitate to suggest adding these activities to the request (but if and only if the foundation is prepared to pay the additional cost of the added line items).

It is often helpful to ask the applicant to submit two budgets. One would be the total budget for the project, including grants from other sources and earned income. The other would be the budget dedicated solely to the amount requested from your foundation, showing exactly how the applicant proposes to spend the dollars being requested. These two budgets allow you to understand the full scope of the project.