Make Sure Your Budget Tells Your Story: The Narrative
In my experience, in many cases the budget narrative is more under-utilized than the budget spreadsheet when making a compelling case for funding. I’ve been guilty of creating a less than scintillating budget narratives myself – budgets are pretty dry, and the required information in a budget narrative can turn into boringsville very easily just by default. Don’t give in! Not only should your narrative describe and explain the details of your budget spreadsheet, it should enhance and strengthen your request. That might seem like a tall order for a document that largely consists of 2 nights x 2 people x 300 per hotel room = $1200, but it can be done! A few things to keep in mind:
Directly Address the Budget Big Picture: Sometimes it is hard to know how to talk about costs. Nonprofits are conditioned to be defensive and worried about expenses – is overhead too high? Are administrative costs unreasonable? That can lead to organizations shying away from talking about the bigger questions that budgets should address like efficiency. It’s better to address these things head on than leave funders to draw their own conclusions. Talk specifically about how and where your budget is efficient. Tell funders how you determine your administrative and support costs and how those costs improve your impact.
Demonstrate Value: Value, sometimes called cost effectiveness, can also inspire defensiveness because we all feel the need to justify our costs. But value is ultimately showing the benefits of the costs incurred. It is easy to show value of activities by tying the activities directly to impact. But other sometimes missed places to show a lot of value are staffing, where highlighting staff expertise and experience showcases cost effectiveness very nicely. Look at your direct costs from a benefit perspective – what benefit does each cost create to your work? Capture as much of that as you can in your narrative.
Explain and Clarify: Some budget items are straightforward and easy to understand. Some budget items are complicated and not obvious, and some are downright strange! Explain the purpose and use of any less common or complex budget items so that a layman can understand the necessity of the expense. Remember that reviewers are not always subject matter experts – double check how understandable budget items are with someone at your organization who is not an expert in the details of your program. If they’re not sure what something is or why it is necessary, a funder might not either.
Speak Plainly: Relatedly, use simple, straightforward language when describing costs. After all, a budget narrative is a narrative – it should be readable. Strip out unnecessary jargon, and over-complicated or overly verbose language. Aim for something that is both easy and pleasant to read.
Check It Twice: Closing with the easiest and therefore easiest missed item. Make sure your budget narrative aligns with your budget! Double check that all your costs are the same across both documents.
