Budgeting

There is generally an instinct to minimise the budget for a project – and often for excellent reasons. While it is important to be able to demonstrate that a budget is not unnecessarily extravagant, it is sensible to ensure that it makes adequate provision not only for the project itself, but also for contingencies and organisational costs.

Areas to consider might include:

Revenue

• Salary costs, together with employer’s NI and pension contributions and any benefits offered by your organisation
• Event costs, including venue hire (notional and actual), occasional staff and consultant / speaker costs, equipment hire, materials
• Monitoring and Evaluation costs, which might include occasional research projects, collection and analysis of feedback from participants and measuring progress against project milestones
• Documentation costs – ensuring that a good record is kept of a project through photography, filming, collecting examples of work, blogging, webcasts, tweets or almost any other medium!
• Communication costs – printing, photocopying, telephone, postage and branded merchandise, for example
• Volunteer expenses – for travel and subsistence
• Travel costs directly associated with delivery
• Staff and Volunteer Training and Development

Capital

This is likely to be restricted to costs associated with equipment required for the project – for example one or more computers and associated peripherals – but, in more complex projects could include building work to support the delivery of a project.

Core

As well as being important in recognising the true cost of a project, core costs also give an organisation a relatively painless way to support an initiative. Core costs might include items such as:

• Office space, and the associated costs of heating, lighting, electricity and cleaning
• Administration costs – will delivery be supported by existing secretarial or reception staff?
• Insurances
• Office supplies, furniture and equipment (there may be some overlap with other expenditure headings)

Other

• Contingency – usually expressed as a percentage of overall project costs. A typical figure would be between 2.5% and 5%.
• Non-recoverable VAT – your organisation’s finance department will be able to offer advice on the effective rate of VAT for which you are liable and which items within a budget are subject to VAT
• Inflation – for multi-annual projects, it is advisable to allow for inflation, particularly in the case of staff costs. Although inflation is currently low, a provision of 2% pa is recommended.