Story 11: Learning to Lead

Story | Related Media | Archives | Print | eMail | Search

Sidebar: Estimating Grant Contributions to the Operating Budget

Written by Mike Spock

As we became better and better at living within very tight budgets, an artifact of our extreme caution was playing hob with the lives of some staff (developers, design and production designers and technicians) living from year to year on soft money—grants that would

not be in place months after the spring budgeting cycle was completed. Yet we had to come up with income estimates based on the evidence on hand. We couldn't just cross our fingers and hope for the best. So, as always, we erred on the side of caution. We told our soft money staff that they were in the project budgets but we couldn't guarantee a full-time place in the operating budget until the grant notice came in—or didn't. While we where very good at getting grants (Anne Butterfield, keeping score, claimed we hit 80 percent over the years), it didn't reassure our ability to guess which proposal would support which developer. After many painful budget cycles and developer spreadsheets, we tried out a new variation. It fit on one page, and after tiptoing through some cycles we found that it worked. We would list the proposals that were still out or would be written later, how much we had asked for, how much the funder was likely give us in the next year, how much of that reduced amount could be counted as overhead and not charged directly to project costs, and the most critical number of all, our best guess that the project would be funded. We repeated the estimate for each proposal and then calculated the bottom line for the sum all the estimates as follows: (see chart below)

So we put a line item in the budget on the income side of $15,500. It scared us to death on the first couple of budget cycles, but we came to trust the soundness of that number, and because we were so circumspect in our estimates of the size of the grants, and the probability of getting them, we never found ourselves out on a limb. And there were fewer developers, designers and technicians hung out to dry waiting for the news of their fates.

The End