Do you ever make this common mistake in your bids?
Most of us who work in the charity sector are kind, compassionate, sensitive human beings. Which can be a problem when it comes to asking for money. We are far too polite! We are tempted to go round the houses and not get to the crux of the matter because it’s regarded as impolite to talk about the filthy lucre.
When there is no application form and no question asking, ‘How much is your project going to cost? and ‘How much do you want from us?’, it is all too easy to actually forget to ask for the money! It’s true. I’ve seen it happen.
You can submit a great application but if you haven’t actually asked the funder for the money, how will they know how much to give you? Should they guess? How are they supposed to know if you want £300, £3,000 or £300,000? Are they likely to contact you and ask you how much you want? If yours is the only application they receive that year and it sounds like an interesting proposal, then maybe. However, in reality, they are likely to be swamped with applications and they will not have the time nor the inclination to follow it up if you have not given them all the information they need in the first place. Your application is likely to end up in the pile marked ‘FIB = Filed In Bin!’
If you are applying to a funder, large or small, with or without a formal application form, they know that you are applying because you need money. There is no point being coy about it. You are not being impolite; you are simply being clear about what you need.
So, why don’t you start your blank applications like this…?
‘Please will you give us [£insert amount here] and we will…’
Go on, I dare you!
How much should you ask for?
Do you simply pluck a figure out of thin air? Do you make your best guess? Emphatically, ‘No’! Even if you only have room in the application to put in the total figure, this must be based on real and realistic costs.
If you are applying for core costs – the basic, fixed costs of running your organisation, irrespective of what work you do e.g. office rent, utilities, the Chief Executive’s salary and admin costs – then it should be easy to work out the real costs. You will need to work this out over a period of time e.g. one, two or three years, depending on how long you are asking the funder to cover your core costs.
Top Tip: When applying for salary costs, whether as part of core costs or as part of a project budget, make sure you add on a percentage each year for inflation / cost of living rises. Also, make sure you include national insurance and pension costs. A reasonable figure for all these costs – referred to as ‘on-costs’ – is around 20% of the salary for each role.
If you are applying for project costs – the costs of running a new, timebound, specific piece of development work, which may include staffing and resources and even capital costs – you will not necessarily know how much this is going to cost. Even if the funder only asks you for the total cost figure, you will need to work out a detailed project budget. This is in case the funder asks for it at a later date to justify your spending and also because you need to know how much your project will cost. If you don’t budget in advance, there is a risk that you will underestimate how much it will cost and you will run out of money half way through. In this case, the funder will be unimpressed and may mark you down as an organisation that is not worth funding in the future. Grant funders large and small want to give their money away to organisations that are capable of managing it effectively. This starts with having a clear, real and realistic project budget.
Top Tip: Your budget costs must be real and realistic . ‘Real’ means they must be based on actual costs. ‘Realistic’, means they must reflect the actual cost of delivery and not be under- or over-estimated.
When the Tour de France came to Yorkshire – where I happen to live – I was involved in a project for school children to design flags to decorate their village high street. To draw up a project budget, one of the things I had to do was find out the cost of producing a dozen, full-size flags with the children’s designs on. I had no idea; I’d never had to cost this up before. I did the research on-line. I was amazed at how many companies there are in the UK producing flags and banners of all descriptions! At first, I didn’t even know what I needed to ask for but as the flag-makers asked me questions, I gradually worked out a specification for exactly what I needed. Armed with this knowledge, I gathered quotations from at least a dozen flag-makers. For the project budget, I chose the prices for the company that I thought represented best Value for Money (VfM) in terms of cost and also quality. I saved the best three quotes in my folders in case the funder questioned how I had come up with the figures. This is an example of using real costs for your project budget.
Top Tip: Always save your workings out – the quotations and calculations you have used to put your project budget together – in case the funder wants to do an audit.
Real costs should then be used to produce realistic costs. If, for example, your project involves staff travelling around to visit beneficiaries in their homes or to meet with them at different locations, you will need to include the travel costs in your project budget. It is very easy to underestimate the mileage that will be incurred throughout the life of a project, particularly if your staff are operating across a large, rural area. Even in an urban setting, it can be a 10-mile trip or more from one side of the city to another. How are your staff going to continue to deliver the project if you run out of money for travel half way through the project?
Top Tip: Never under-estimate mileage / travel costs.
You will need to consider how many members of staff you will have, how many trips / visits will they each be making each year, how far they will be travelling and how much each trip will cost. If staff will be using public transport, you can find out the current costs of the buses / trains / trams and use those figures. Remember to factor in possible price rises if your project will run over more than one year. If staff will be using their own vehicles (cars, motorbikes or bicycles), you can use the HMRC mileage rates to calculate the costs. This is an example of how you can ensure that you calculate a realistic budget based on real costs.
Top Tip: Don’t be tempted to put lower figures into your project budget because you think you are more likely to get the money if you ask for less. That tactic won’t work because the funder wants your budget to be realistic.