Showing how you will manage your grant is just as crucial to your application as being clear about your creative mission and vision. The Africa No Filter Academy workshop on Budgeting and Financial Management, held on 17 August, was aimed at helping creative professionals master the art of writing budgets and managing funds successfully. It was presented by Paul Nwulu - a strategic communication consultant and content creator who worked as a grantmaker at Ford Foundation – and Cathy Khattar, grants manager at the Arab Fund for Arts and Culture. The session was moderated by Victor Mark-Onyegbu, Africa No Filter’s grants manager.
Here is what you can do to align your budget to funders' expectations and report effectively once a grant is awarded.
- Understanding budgets from the funder's perspective: Funders simply see a budget as a categorical list of anticipated project costs that represents the best estimate of the funds needed to deliver or execute the work described in a proposal.
- Budgeting is part of financial management: The financial management cycle comprises of setting out a budget (including projected spends and income); implementing plans (spending and receiving income); monitoring your income and spending in accordance with your budget and finally, reporting, learning and acting. Remember that a good budget speaks for you – it reflects your ability to deliver, transparency, value for money, competitiveness as well as attention to detail.
- Major components of a budget: A budget can be very brief or detailed, which usually depends on the specifications of a funder. However, some standard budgetary considerations include project activities, organisational and sustainability expenses. Most importantly, ensure you read the precise budgetary requirements of a funder before preparing your budgets. Most funders specify a budget framework by providing sub-heads and expenditure categories. Some other funders like Africa No Filter also specify grant categories like Project Support Grants and Operational Support Grants. You can see our grants here.
- Types of costs to report on: when reporting, some funders specify what costs you should report on and provide expenditure categories and sub-heads. This could include operational or project costs, staff costs, core costs, sustainability costs, capital costs and contingency costs. You must note that some funders may not recognise reporting on contingency costs as best practice. Your contingency costs could be spread into your indirect costs. Contingency is usually decided by several factors including the environment where the project is being delivered and does not have a fixed percentage. It could range from 5% to 30%.
- Added resources: Financial reporting best practice is to show other resources received for your project including things like in-kind contributions, tax incentives, pre-sales, fiscal sponsorship and product placement.
- Have a checklist for your budget: things to consider include ensuring that you have the correct numbers, choosing a format (for instance reporting through Excel) and using it consistently. It is also beneficial to engage your team when drafting a budget and later reporting on it. Check your maths multiple times. Additionally, factor in inflation and exchange rates and explain any extraordinary costs. Lastly, have an extra eye look over before you submit.
- Have a financial reporting mindset: it is important to have a mindset of financial reporting from the commencement of your project. Keep your receipts and invoices intact from the beginning and create a reporting template/spreadsheet for yourself either by using a tool like Microsoft Excel or simply doing it offline or manually. In the absence of an invoice, keep correct records of your expenditure, including name, address and contact number of vendors, dates, amount, a narrative explanation and any other detail that could prove transparency to the funder.
- For grants paid in USD or foreign currencies: the best practice is to exchange at the official rate and official sources but if you must use the black markets, try to minimise your electronic financial trails with the currency vendor. Some currency vendors have been implicated in money laundering or activities that have implications on national security.
- Communication: always communicate with your funder regarding potentially contentious issues. Some funders cater to tens and hundreds of grantees, so it is important to find out the best form and frequency of communication.
Watch ANF Academy: Budgeting and Financial Management Workshophere.
Want to apply for a grant but do not know where to start? Watch the Africa No Filter Academy Grant Writing for Creatives workshop here.