If you are using employees for the project, don’t forget to add payroll taxes (FICA,
Medicare, unemployment and workers’ compensation) and fringe benefits such as health
insurance. You can include a portion of these costs equal to the portion of the person’s
time dedicated to the project.
For independent contractors, list either the flat fee you will pay ($1,500 to design
costumes for a play) or the hourly rate ($40/hour x 40 hours).
Direct Project Expenses are non-personnel expenses you would not incur if you did not
do the project. They can be almost anything: travel costs, printing, space or equipment
rental, supplies, insurance, or meeting expenses such as food.
Remember that you will have to live with this budget; you can’t go back to the funder
and ask for more money because you forgot something. Think carefully about all the
expenses you will have. If you will be hiring new people, for example, don’t forget that
you may have to pay for classified ads. Also take the time to get accurate estimates. If
you will be printing a brochure, don’t guess at the cost. Call your printer and ask for a
rough estimate.
Administrative or Overhead Expenses are non-personnel expenses you will incur
whether or not you do the project. But if you do the project, these resources can’t be used
for anything else. For example, if you pay $500 a month for an office with space for four
employees, you will continue to rent the office even if the project doesn’t happen. But if
the project does happen, one-quarter of the office space will be occupied by the project
director. So you can charge for one-quarter of your office rent, utilities and administrative
costs, such as phone, copying, postage and office supplies.
Be sure to read the funder’s fine print on administrative or overhead expenses (sometimes
called indirect expenses). Some funders don't cover administrative expenses. Some
instruct you to charge a flat percentage of your direct expenses. Others will allow you to
itemize. If the funder has rules about overhead, remember that some of your personnel
costs may in fact be "overhead" and should be moved to this section. An example is an
executive director supervising a project director. You will pay the executive director
whether or not you do the project, so she could be considered an administrative expense.
Note: Be sure to add up all your expenses carefully. Incorrect addition on budgets is one
of the most common errors in a grant proposal.
INCOME
All income for a project fits into two categories:
• Earned Income
• Contributed Income
Earned Income is what people give you in exchange for the service or product your
project generates. Not all projects generate income, but many do. A play generates ticket