Planning your Project Budget

1. Planning your Project Budget Jennifer Harrison & Steve Baylis

2. Why is a Budget Important? • It is your projects financial plan for the life of your project. • It will ensure that your organisation has the resources to carry out its project aims and objectives • It also enables you to make good financial decisions and keep control of your finances rather than relying on guesswork. • Your project budgets are also your guide to whether you are spending your money as you had planned. Good budget planning and financial management will assist warning of overspend, under-spend, or spending in unexpected areas.

3. Where to begin? • Take time to read any information provided by the funder on what they will (eligible) and will not (ineligible) fund. • One of the stages of planning your project is to work out your budget. It is only once you have decided what you require to run your project, will you know how to write down an accurate budget. • Make sure that all project costs have been considered and break down your costs in detail. Do not offer ‘ball park’ figures to funders. Research you project costs and be as accurate as you can.

4. Understanding Budget Headings Your budget is likely to be divided into two halves: • Income – the money you expect to receive. • Expenditure – the money you will spend on running the project, all its activities and services.

5. Understanding Costings • Direct Costs –These are thecosts that are clearly identifiable as part of the project. • Indirect costs (Overheads) – these are the costs of resources used by a project, which are shared by other activities. This maybe an element of core costs and can be recovered if deemed eligible by the funder, providing the method of calculation is appropriate and realistic. Most funders would recognise this as full cost recovery.

6. Example of Budget Breakdown Template

7. Example Price Guides PRICE GUIDES • STAFF - APPROX COST • Professional Project Manager £24k–£32k per annum plus on-costs • Administrative/Clerical Support £17.5k–£22k per annum plus on-costs • Professional Technical Support £17.5k–£28k per annum plus on-costs • Qualified Education/ Learning/ Outreach/Community Development Officers £22–28K per annumplus on-costs • Value of volunteer labour (one of your non-cash contributions to the project) • £150 per day for skilled labour • £50 per day for unskilled labour

8. Example Price Guides (Cont…) VOLUNTEER RATES (per Hour) APPROX COST • Driver - £5.00 • Environmental Worker - £6.00 • Crèche worker - £5.00 • Administrator - £7.75 • Co-ordinator - £10.85 • Researcher - £10.85 • Trainer - £10.85 • Manager - £13.85 • Professional Costs - £15.00

9. Hints & Tips • Read the funders guidance on eligible and ineligible expenditure prior to costing your project. • Involve your Treasurer or Finance Officer in the financial planning and ensure your have the permission to use your organisations financial and non-financial resources prior to costing your project. • Keep notes on how you reach your figures, so that you can explain them if asked. • If you can find out the precise cost of something - do! DON'TGUESS the price of a photocopier or other equipment, get quotes from a few different suppliers or use catalogues to get prices.

10. Hints & Tips • If you employ workers. Don't forget to include costs of Employer's PAYE, National Insurance, pension contributions, salary increments, annual pay rises etc. • If you're planning expenditure for subsequent years you need to take into account price rises so don't forget to add on inflation at the current rate. • Now look again at the figures. Have you left anything out? Make sure your figures add up correctly and does it relate to what your project is aiming to achieve?

11. Thank you Jennifer Harrison External Funding Officer Sandwell Metropolitan Borough Council Steve Baylis Organisational Development Officer – Finance Sandwell Council of Voluntary Organisations