"It's clearly a budget. It's got a lot of numbers in it."
“We didn't actually overspend our budget. The allocation simply fell short of our expenditure.”
This section outlines how to develop a comprehensive, compliant budget for your funding application. Your budget may be presented as a simple one-page statement of income and expenses (plus budget justification, see below) or a complex set of budget papers, including explanatory notes and detailed revenue or expense items.
- Is one of the most important sections of your application
- Must detail how much your proposal will cost to deliver and how much funding you are requesting
- Is completed after you have:
- Planned your proposal
- Identified the staff, operating needs and other costs required to deliver the proposed project, program or service
- Needs to be PRECISE, ACCURATE and TRANSPARENT.
Pay particular attention to all aspects of your budget. It is the part of funding applications which often lack sufficient detail, contain mathematical errors, or misses key components. Be honest about your proposed expenditure and income and have it checked by an independent reviewer. Your budget needs to clearly:
- Show the total costs involved in delivering your proposal
- Indicate the amount of in-kind support provided
- State how much funding you are seeking (i.e. your 'price')
- Demonstrate how the funding will be allocated
- Justify the funding amount requested.
Carefully read the budget criteria in the application guidelines when planning your proposal and identifying resources.
- Exclusions on the types of expenses (e.g., no overhead costs allowed)
- Spending caps on certain expenses (e.g., travel limited to $10,000)
- Overall funding limits (e.g., total costs cannot exceed $300,000 per year)
- Whether your budget should be GST inclusive or exclusive.
Determining Budget Costs
Identify all costs that are necessary and reasonable to execute your proposal. All costs should be in proportion to the anticipated outcomes. Ask yourself whether the costs are:
- Able to be allocated to an activity or resource?
Common costs are detailed in the table below.
|Personnel costs||Non-personnel costs|
|Consultants, partnerships, and consortiums||Printing|
|Training and professional development||Overheads|
Your in-kind costs are any resources that are required to deliver your proposal but for which you are not seeking funding. For example:
- Your activities may be delivered by volunteers
- Overhead costs may be provided in-kind.
Estimate the costs of these contributions and inform the funder. Emphasise that your organisation is not seeking funding for these items.
In-kind costs demonstrate to the funder that your proposal:
- Offers value for money
- Is sustainable as your organisation is also contributing to its delivery.
Set aside a portion of your budget (usually 10%) for contingencies and unpredictable demands (e.g., recruitment advertising, staff training).
If your anticpated costs exceed the amount allowable in the application guidelines, you will need to:
- Make decisions about those activities that are not essential for your proposal
- Identify where you might seek additional funding or support from other sources.
Depending on the available funds, you may need to prioritise:
- How much service and/or how many services you can provide
- How many staff you can support
- The achievable outcomes.
If the costs of your proposal are prohibitive consider:
- Scaling back your plans
- Removing the least cost-effective expenditures
- Approaching other funders to support some components.
National Standard of Accounts
It may be beneficial to refer to the National Standard Chart of Accounts as a reference when completing budgets. The National Standard Chart of Accounts is an agreed list of accounts and definitions used by Australian Governments when requesting financial information from not-for-profit community organisations. The Not for Profit Accounting Specialists website contains training manuals for some states and territories.
A budget jusitification (or budget narrative) is an essential part of your application. It describes each budget item and justifies why each item is needed and how much each item will cost.
A budget justification:
- Explains the rationale behind each expenditure line
- Indicates how your budget is cost effective and offers value for money.
It may include explanations about:
- The roles and tasks of the staffing positions as they relate to the prosposed program of work (i.e., what will they do)
- Any proposed travel and accomodation costs (i.e., why, where, how often, how long with precise details of costs involved)
- Any new equipment purchases (i.e., what it is, why you need it, how it will be used).
Your budget justification section should:
- Explain all line items in the budget
- Indicate how your proposed expenses are reasonable and necessary for the conduct of the proposed service/program
- Highlight how your budget is cost effective and offers value for money
- Outline the in-kind support offered by partnering organisations, senior team members, or volunteers in your budget justificaton and indicate the proportion of the overall cost of the proposal that this represents.
Review Your Budget
Complete Activity 7.4 Your Budget Costs Checklist to make sure your budget:
- Complies with the funding application guidelines
- Details all the costs associated with delivering your proposal
- Is accurate, specific, reasonable, and transparent.
- You can not complete your budget until you have planned your services/program and identified the staff and/or operating needs required.
- Be precise — a budget for $19,870 is more precise than a request for $20,000 and indicates the care and precision you have taken with the proposal and budget.
- Set aside a portion of your budget for contingencies and unpredictable demands (e.g., fluctuations in user needs such as out of hours care, recruitment advertising, staff training).
- Plan your budget so that it takes into account periods of high service demand/needs.
- Refer to the National Standard Chart of Accounts as a reference when completing budgets.
- Prior to submitting your application, double check your budget to make sure that your anticipated costs/expenditure do not exceed the funding application budget, or any limits of subsections within it.
Complete the activities below by entering text into the fields provided and/or completing the attached documents. If you download and complete an attached document, you will have to save this to your personal file.
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