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Developing a budget

Posted on 24 October, 2022 at 12:04

A budget is a document that specifies how money will be allocated to carry out the activities described in the proposal. Budget in simple terms, is a document where you specify how much money you are going to spend (in other words, your expenditure), especially if your organization has received grants. Consider the budget to be the proposal's narrative in numbers. The budget provides a detailed breakdown of all costs associated with completing a project. In a nutshell, a budget is a numerical description of the project. The budget is likely to be the most important aspect of any proposal. It is critical to focus on the budget early in the proposal writing process to ensure that it is clear and that all proposed expenditures are justified. To persuade donors to provide funding, a proper budget is required.  


Developing budget is always a complicated task for NGOs, especially when they need to develop a
proposal and satisfy every entry given by the donor agency in the budget format. Sometimes it is easier
to write a proposal than to develop a budget to request for funding. Budgets will continue to become more complicated. However, if you keep your financial system clear, the task of developing it becomes simpler. Budgets have become complicated because of the increased need for transparency and accountability.


When developing a budget there is need to involve other interested stakeholders, the organization’s senior and more experienced staff members should be involved in developing the
budget. They should be in a position to take responsibility for the financial aspects of the organization or
project. It is even better, if they have experience in managing project finances in a cost-effective

It is important for all these staff members to be aware of the vision and objectives of the organization;
the needs and integrities of the project implemented; the administration and financial policies of the
organization; and the approaches of the donor agency. The board members of the organization may
have also constituted a finance committee to oversee the income and expenses. It would be a good idea
to involve one member of this committee or take his/her opinion


The process of developing a budget for a project or an organization involves going back and forth from
your activities to your budget and from your budget to your activities. This process will continue until
you have refined the budget and gained confidence in the entire proposal. When conceiving a project, you also decide on the activities you want to be implemented. Alternatively, if you are planning the budget for your NGO, you need to list out the activities that will be carried out for the coming year.
Have a discussion with your team about the costs involved in implementing various project activities.
What kind of manpower and material support is required for these activities? Make some flipcharts and on each of them, write down a project activity. Discuss with your team the inputs required for delivering these activities. Estimate the real costs for these inputs. Whether it is to cover the expenses of the staff members involved in the project activity, the costs of materials or travel, all of these can be written down on the flip chart for each activity.

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