A budget can make or break a proposal. A proportion of core or indirect costs of an organisation need to be included in the project budget. Bearing this in mind, there are certain line items that are included in budgets that donors are happy to see, while other line items will likely cause discomfort.
There are some donors who remain unwilling to fund core costs. However, this is changing as progressive donors are becoming aware of the value of ensuring the sustainability of the organisations that they support, and the limited approach of seeing projects as “stand-alone”. Many donors now understand that without the organisation and all it stands for, the projects or programmes would not take place. If a donor cannot see the big picture and the link between a project and its organisation, then it is important to discuss this before accepting the funds.
There is progress towards meeting real project costs. In communicating with donors, organisations need to be clear about what programmes really cost.The danger is when funds are accepted that do not fully cover these real costs (direct and indirect), creating knock-on budget shortfalls and crises in time to come.
TIP: Donors are always encouraged to see other funders are on board. Donors talk and tend to instil confidence in one another, so it may not hurt to include who else is funding your organisation when having conversations with your prospective donor.
Author: Alex O’Donoghue: Development Co-ordinator, Inyathelo: The South Africa Institute for Advancement