PREPARING YOUR GRANT PROPOSAL BUDGET

1. PREPARING YOUR GRANT PROPOSAL BUDGET Mandy C. Funchess, CPA PARTNERSchlenker & Cantwell, PA SCHLENKER & CANTWELL, P.A. Certified Public Accountants

2. Grant Accounting • Forms of Grants • private foundations or donors • grants from federal, state or local governmental agencies. • Nature of the grant drives the accounting treatment. • Grant accounting treatment • contributions • exchange transactions for purposes of recording the revenue in the accounting records. SCHLENKER & CANTWELL, P.A. Certified Public Accountants

3. Grant Accounting – cont. • Majority are cost reimbursement grants • Grants require expenditures before receiving grant funds for those expenditures • If expenses exceed amount received, a receivable is recorded, unless allocation was overspent • If amount received exceeds expenses, deferred revenue is recorded • NFP organization provides cash up front and it reimbursed following the expenditures • Advancement Grants – grant funds are received before expenditures are made SCHLENKER & CANTWELL, P.A. Certified Public Accountants

4. Grant Accounting - continued • Grant contracts/agreements • many grant awards require signing a contract or agreement specifying the conditions required for the grant award. It is very important the contract terms are carefully read and understood. These terms often include: • Expenses that can or cannot be incurred with grant funds. • The budget for the grant award, which describes what can or cannot be spent for each budget line item. • The contract period, which is the period of time expenditures can be made from grant funds. • Reporting requirements of program and financial results. • How to submit reimbursement requests for reimbursement grants. SCHLENKER & CANTWELL, P.A. Certified Public Accountants

5. Grant Accounting - continued • The majority of non-governmental grants are in the form of grants from private foundations or corporations. These types of grants are generally treated as contributions (promises to give). • Promises to give are generally recorded as revenues at the time the promise is made (usually with a corresponding receivable). • Promises to give are then characterized as restricted or unrestricted. This characterization can be based on time restrictions (i.e. United Way is a good example) or on purpose restrictions. SCHLENKER & CANTWELL, P.A. Certified Public Accountants

6. DIVERSIFIED PROGRAM FUNDING • United Way can fund up to 50% of an Agency’s prior year revenue • United Way can fund 100% of a program, BUT they strongly prefer not to be the sole funder. • More diversified funding = better chance of United Way funding SCHLENKER & CANTWELL, P.A. Certified Public Accountants

7. Preparing your grant budget…. • What does this mean? • Step 1 - Define the Program! • Step 2 – Begin gathering the required information. • Step 3 – Fill out the forms! SCHLENKER & CANTWELL, P.A. Certified Public Accountants

8. United Way Budget Forms SCHLENKER & CANTWELL, P.A. Certified Public Accountants

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15. PROGRAM BUDGET vs AGENCY BUDGET • Single, direct service program • NOT whole agency! • Pick a program and apply for United Way funding for that program only • The forms are asking for information on only that program SCHLENKER & CANTWELL, P.A. Certified Public Accountants

16. Program budget specifics • What’s your fiscal year end? • “Your actual prior fiscal year budget” – what does this mean? • “Your actual current fiscal year budget” – what does this mean? • Grant period (7/1/14-6/30/15) SCHLENKER & CANTWELL, P.A. Certified Public Accountants

17. Program Budget specifics – cont. Expense specific: • Grant Period: Requesting UWCNM Funding • The $ amount of what you are requesting – assuming 100% funding • UWCNM Funding as a percentage of budgeted expenses • Calculate by dividing the total budget by UWCNM funding SCHLENKER & CANTWELL, P.A. Certified Public Accountants

18. PROGRAM FUNDING SOURCES Revenue • Break down by funding sources • United Way • Government Funding • Foundation/Corporate Support/Contributions • Membership Dues Received • Investment Income • In-kind support • Other income - describe SCHLENKER & CANTWELL, P.A. Certified Public Accountants

19. Program Funding Sources • Details……..Details • Program vs Agency – can they be the same? SCHLENKER & CANTWELL, P.A. Certified Public Accountants

20. Program Budget Expenses • Breakdown by Function expenses categories • Costs that are clearly identifiable to the particular program should be charged here. • Allocation of salaries, benefits, rent, office supplies, etc. for each program. SCHLENKER & CANTWELL, P.A. Certified Public Accountants

21. PROGRAM SURPLUS vs DEFICITS • What is a surplus? Is there such thing as too much “surplus”? • Program deficit? Why? Should we close the program? SCHLENKER & CANTWELL, P.A. Certified Public Accountants

22. Functional Expenses Cost categories: • Program activity – related to mission • Unrelated business income and expenses • Management and administrative expenses – related to overall direction • Fundraising expenses – related to contribution revenues SCHLENKER & CANTWELL, P.A. Certified Public Accountants

23. Functional Expenses Ratios • Admin. & Fundraising Cost Ratio Total admin. & fundraising costs Total costs Sample NPO: $ 295,000 = 18% 1,640,000 • Fundraising Efficiency Ratio Total fundraising costs Total contributions Sample NPO: $ 50,000 = 15% 350,000 SCHLENKER & CANTWELL, P.A. Certified Public Accountants

24. Functional Expenses, continued Where to charge expenses: Costs that are clearly identifiable to a particular activity (program, fundraising, management & general) should be charged to that cost center. • Fundraising costs – cost of all materials & activities that include a fundraising appeal • Management & general – cost of publicity and public relation activities designed to keep the organization’s name before prospective contributors SCHLENKER & CANTWELL, P.A. Certified Public Accountants

25. Functional Expenses, continued Joint costs should be allocated with a rational and systematic method resulting in a reasonable allocation of costs. • Physical units method – number of lines, copies, square inches, etc. • Relative direct cost method – % of salaries, % of total expenses, etc. SCHLENKER & CANTWELL, P.A. Certified Public Accountants

26. Conclusion Questions? SCHLENKER & CANTWELL, P.A. Certified Public Accountants

27. Thank You!! Mandy C. Funchess, CPA mfunchess@cpasch.com 505-275-3915 SCHLENKER & CANTWELL, P.A. Certified Public Accountants