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Clark Schaefer Hackett | Unlocking Opportunities: Grants and Budgeting for Not-for-Profits

Michigan Business Network
May 14, 2024 10:00 AM

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Grants and Organizational Budgets for Not-for-Profits

Organizational budgets play a crucial role in guiding not-for-profit organizations toward achieving their mission. Covering all programs and operational costs, it is an essential organizational asset that must be well-maintained. Grant budgets, a subset of this, are specifically funded for particular purposes by grantors and also carry significant importance.

Read our article by Sherry Henning to learn more about not-for-profit budgeting, as well as gain insights to help your organization maximize its budgeting potential. Also, if you like what you read, there is plenty more on the topic which will be covered in our upcoming webinar. Check out the details below and make sure you register.

By: Sherry Henning

Organizational budgets help serve as a benchmark and are developed to assist in achieving your mission.  The organizational budget includes all your programs that provide services to the community as well as administrative and overhead costs to run your not-for-profit. 

Grant budgets are a subset and portion of the organizational budget as a whole and are primarily, and often fully, funded by a grantor for a specific purpose.

Budgeting 101

Grant budgeting is part of the larger process to meet the needs to fulfill the revenue that covers a portion of those expenses. The importance of knowing what part it covers is key in determining how and what to propose in the grant process. 

Here are a couple key pieces that are important to take into consideration as a grant budget proposal is being developed:  

  1. Determine which program best aligns with and meets the grant requirements.
  2. Consider whether this grant will cover existing expenses or additional expenses that were not included in the organizational budget. 
  3. Ensure the expenses are not already covered by another grant or funding source. Grants are contributions to cover expenses that are not already being covered by another revenue source. Covering an expense with two funding sources is called double dipping and almost always not allowed. 
  4. Allocate shared administrative, program, and overhead costs among the relative grants and funding sources as allowable. Determine if using an indirect cost rate or de-minis rate and include in the grant budgets to cover these expenses. 

Grant budgets are an essential component of the organizational budget as well as meeting compliance requirements of the grants. Gaps in proper budgeting and grant reporting can create many issues ranging from compliance to improper grant reporting.  Organizational budgets are also essential to the proper monitoring and making sure that resourced needed to accomplish your not-for-profit mission are funded.

Interested in more information? Tune into our webinar!

Clark, Schaefer, Hackett & Co. is hosting a free webinar on Thursday, May 23, 2024 at 1PM EST. Our presenters will cover this topic in more depth along with topics such as accounting for conditional grants and grant budgeting. Please join us to learn more about these topics and see if calculating an indirect cost rate could be a major win for your organization.

images courtesy of Clark Schaefer Hackett and iStock

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Michigan Business Network is an online broadcasting company that provides knowledge, news, and insights into Michigan’s businesses, industries, and economy.