PREPARING YOUR GRANT PROPOSAL BUDGET

PREPARING YOUR GRANT PROPOSAL BUDGET

MANDY C. FUNCHESS, CPA

PARTNERSCHLENKER & CANTWELL, PA

SCHLENKER & CANTWELL, P.A.CERTIFIED PUBLIC ACCOUNTANTS

Grant Accounting

• Forms of Grants – private foundations or donors – grants from federal, state or local governmental agencies.

• Nature of the grant drives the accounting treatment.

• Grant accounting treatment– contributions – exchange transactions for purposes of recording the

revenue in the accounting records.


Grant Accounting – cont.

• Majority are cost reimbursement grants– Grants require expenditures before receiving grant funds

for those expenditures– If expenses exceed amount received, a receivable is

recorded, unless allocation was overspent– If amount received exceeds expenses, deferred revenue is

recorded– NFP organization provides cash up front and it reimbursed

following the expenditures• Advancement Grants – grant funds are received

before expenditures are made


Grant Accounting - continued

• Grant contracts/agreements– many grant awards require signing a contract or agreement

specifying the conditions required for the grant award. It is very important the contract terms are carefully read and understood. These terms often include: • Expenses that can or cannot be incurred with grant funds.• The budget for the grant award, which describes what can or

cannot be spent for each budget line item.• The contract period, which is the period of time expenditures can

be made from grant funds.• Reporting requirements of program and financial results.• How to submit reimbursement requests for reimbursement grants.


Grant Accounting - continued

• The majority of non-governmental grants are in the form of grants from private foundations or corporations. These types of grants are generally treated as contributions (promises to give).

• Promises to give are generally recorded as revenues at the time the promise is made (usually with a corresponding receivable).

• Promises to give are then characterized as restricted or unrestricted. This characterization can be based on time restrictions (i.e. United Way is a good example) or on purpose restrictions.


DIVERSIFIED PROGRAM FUNDING

• United Way can fund up to 50% of an Agency’s prior year revenue

• United Way can fund 100% of a program, BUT they strongly prefer not to be the sole funder.

• More diversified funding = better chance of United Way funding


Preparing your grant budget….

• What does this mean?

• Step 1 - Define the Program!• Step 2 – Begin gathering the required

information.• Step 3 – Fill out the forms!


United Way

Budget Forms





PROGRAM BUDGET VS

AGENCY BUDGET

• Single, direct service program• NOT whole agency!• Pick a program and apply for United Way

funding for that program only• The forms are asking for information on only

that program


PROGRAM BUDGET SPECIFICS

• What’s your fiscal year end?• “Your actual prior fiscal year budget” – what

does this mean?• “Your actual current fiscal year budget” – what

does this mean?• Grant period (7/1/14-6/30/15)


Program Budget specifics – cont.

Expense specific:– Grant Period: Requesting UWCNM Funding• The $ amount of what you are requesting – assuming

100% funding

– UWCNM Funding as a percentage of budgeted expenses• Calculate by dividing the total budget by UWCNM

funding


PROGRAM FUNDING SOURCES

Revenue– Break down by funding sources• United Way• Government Funding• Foundation/Corporate Support/Contributions• Membership Dues Received• Investment Income• In-kind support• Other income - describe


Program Funding Sources

• Details……..Details• Program vs Agency – can they be the same?


Program Budget Expenses

• Breakdown by Function expenses categories– Costs that are clearly identifiable to the particular

program should be charged here.• Allocation of salaries, benefits, rent, office supplies, etc.

for each program.


PROGRAM SURPLUS VS DEFICITS

• What is a surplus? Is there such thing as too much “surplus”?

• Program deficit? Why? Should we close the program?


Functional Expenses

Cost categories:• Program activity – related to mission• Unrelated business income and expenses• Management and

administrative expenses – related to overall direction

• Fundraising expenses – related to contribution revenues


Functional Expenses Ratios• Admin. & Fundraising Cost Ratio Total admin. & fundraising costs Total costs

Sample NPO: $ 295,000 = 18% 1,640,000

• Fundraising Efficiency Ratio

Total fundraising costs Total contributions

Sample NPO: $ 50,000 = 15% 350,000


Functional Expenses, continued

Where to charge expenses:

Costs that are clearly identifiable to a particular activity (program, fundraising, management & general) should be charged to that cost center. – Fundraising costs – cost of all materials & activities

that include a fundraising appeal– Management & general – cost of publicity and public

relation activities designed to keep the organization’s name before prospective contributors


Functional Expenses, continued

Joint costs should be allocated with a rational and systematic method resulting in a reasonable allocation of costs.– Physical units method – number of lines, copies,

square inches, etc.– Relative direct cost method – % of salaries, % of

total expenses, etc.


CONCLUSION

QUESTIONS?


THANK YOU!!

MANDY C. FUNCHESS, CPA

[email protected]

505-275-3915


Documents

PREPARING YOUR GRANT PROPOSAL BUDGET