Budgets are Beautiful
Fundraising trainer and consultant Fern Potter explains how to make sure your budgets are exciting, beautiful and creative.
Over the years, I’ve worked with various people in developing proposals for fundraising. I love the buzz of getting the creative juices going by asking the right questions of the artists planning to produce, perform, or commission work. Their ideas flow without hesitation – great excitement and enthusiasm…. until you start to ask questions about the budget. I’m often asked: do we really have to deal with this? I sensed their pain….I once felt the same and dreaded crunching the numbers to devise budgets. That was until I learned just how exciting and creative budgets can be – just like the artistic work being planned for execution.
Budgets are beautiful. It is like a script to the story of your project – a blueprint for what you plan to do in order to achieve your artistic aims.
Budgets are revealing – and bring clarity to what you want to achieve in your project. A budget is just another way of describing a piece of art from a different perspective. The numbers are important and I’m surprised by the number of creatives who are frightened by them or think they are somehow unartistic.
A budget is forward looking – it is NOT a forecast – it is a commitment and help with making important decisions about what you want to do.
Be creative with your budget.
Some of the boldest and most thrilling ideas often come from discussing figures, whether it is coming up with creative solutions for working with restricted resources, or seeing how a process might fit together in a way that you hadn’t previously spotted.
A budget can be a tool for advocacy as well as planning. A well-put-together budget will help to communicate different ideas (or a new angle) to different project partners.
Creating budgets is pure logic! There is something deeply satisfying about delving into intricacies of an artistic aspiration and quantifying it in figures.
I often start a budget at the same time as the project is evolving – just to gauge how large or small the fundraising need might be. Developing the budget alongside the proposal text ensures that the budget will match what you say you are going to do with each aspect costed. Most budgets fail because people forget items that have been discussed in the written part of a proposal.
I sometimes challenge people to look at a completed budget without looking at the text, and describe the narrative of the project - what it will include, how many will benefit, where it will happen (and when) and what resources are needed to ensure a project is successful.
So here are some tips to creating beautiful budgets….
- Never pull your budget figures out of the air – do your research! Treat your budget in the same way you would approach your decisions about who will perform, teach, or deliver the project. Give it the same amount of thoughtfulness and consideration and make sure the budget adds up.
- Show your research and calculations in your notes where the income or expenditure figure is listed. This will save you an enormous amount of time later on when you are successful in raising the funds and need to get started with your project.
- Anticipate as many costs as possible prior to the start of any project. Discuss this with those who will be responsible for delivering the work and pre-empt as far as possible, any unknowns.
- Aim to put in as many of your costs as possible into the actual (direct) project expenditure. Ideally, budgets should be full-cost recovery, meaning that all project costs, including percentages of overheads are included within your direct cost for undertaking and running your activity. The direct costs refer to any expenditure that happens as a direct result of what your project is aiming to achieve.
- Include a small percentage for contingency – the ‘what-ifs?’ that you may not be able to control. The rule of thumb is this should be around 3-5%; for larger, capital projects, contingencies might raise to 10%. This higher amount will reflect the level of complexity and factors that might be out of your control. Remember – the more contingency you calculate, the more you have to fundraise to cover this additional cost. Arts Council England states that it rarely sees more than 5% contingency in any of their Grants for the Arts budgets. Your contingency costs will be an indirect cost related to your project.
- Another indirect cost may be administrative costs that cannot be attributed to the project but you feel you will incur. These should never be more than 15%; mostly they might range between 10-15%. This figure concurs with what a trustee of a private Trust recently commented to me about funding administration costs: ‘I think it is perfectly reasonable to add 10-15% on to project costs as administration or contribution to core costs. Any sensible donor will realise that you can’t run projects without having a core infrastructure.’ That said, it is always best to put your general costs into direct costs if possible.
- Make reasonable assumptions about your potential to raise income and/or in-kind support for your project. Some funders will look at your past experience to assess whether your supposition tallies with past achievements. This is particularly true when applying to the Arts Council. Be realistic but ambitious.
Budgets can be one of your strongest tools in your toolkit in strengthening your fundraising proposal and creating a strong narrative about your project. Embrace them with enthusiasm and you will reap many benefits in the long term.
For more examples and tips on writing to secure funds, please visit artsfundraising.org.uk to sign up for one of my Writing Strong Funding Applications training days offered by the Arts Funding & Philanthropy’s programme.