We are here to talk to you about budgeting in research and development proj…— wait, where are you going? Come back!
Ahem. Yes, we understand that in project work, budgeting is a word that can strike terror into the heart of any mortal. There are obscure words like flat-rates and unit costs and coefficients and indirect employee costs, and when faced with one of these beasts, it is a perfectly understandable reaction to want to back away slowly and then run for the hills.
However, the budget is a friend, not an enemy. A budget that reflects the activities in the project gives the best possible means for successful execution, and saves many headaches later on. Think of this blog as a how-to guide to learning to love your budget!
Different strokes for different folks
Different funders of R&D projects offer different frameworks for budgeting; how budget items are calculated and what elements can (or should) be included vary quite a bit. Both national and international funding instruments use a variety of different models and fund different percentages of actual costs.
There are some common things you are likely to run into in most budgeting models, with some associated considerations. Here are a few handy tips:
Staff costs: R&D projects tend to be very work-intensive. Most of the budget usually goes into making sure the project team has sufficient staff resources to carry out the work. Think critically about the activities in your project. What kind of expertise do you need? How much work is each phase likely to require?
In many funding models, there are also “extras” associated with staff costs, such as flat-rates or co-efficients. These indirect costs are calculated on top of staff costs based on pre-determined percentages. As percentages and what can and cannot be included varies case by case, remember to always check.
Travel costs: International projects in particular often involve some traveling. Although much of the work can be done remotely, common checkpoints among partners may be needed. Experts or target groups may need to meet in person for co-creation or capacity building. Having a plan for who will be traveling where and when affects the budgeting.
Purchasing goods and services: Sometimes it is necessary to plan activities that go beyond staff resources alone. Perhaps an event or a publication to showcase your project’s results. Remember catering, materials, speaker fees – maybe even premises. For a publication, consider including funds for a professionally designed visual layout, language checks, or perhaps open-access fees for a peer-reviewed journal article. Some management-related costs, such as auditing, may also need to be included.
The black sheep of a family, based otherwise on budgeting real costs, is the unit costs model most prominently used in the Erasmus+ program. In this model, there is only a passing relationship between real costs and how much is budgeted in the application (calculated unit costs). In such cases, it is always good to have a “shadow budget”, an estimation of the actual real-life costs, and make sure that all partners understand this peculiarity of the unit cost funding model.
Plan and budget
The project plan and budget work in concert. Often, preparing the budget is the last weary step in the long trek of completing a project application.
Ideally, however, the project plan and the budget should be developed together. They, after all, have a mutual dependency: a project, however well planned in its content, stays a plan without a budget that reflects the activities and provides the required resources. On the other hand, planning the activities without being aware of funding restrictions can lead to some very unpleasant last-minute surprises.
A budget forces one to review the work plan and logistics critically. A budget forces one to consider who will be doing what, traveling where, purchasing and producing what.
Support for the project team
In case we haven’t scared you off and you made it all the way down here – congratulations! Funding in research and development projects may seem like a maze, but luckily it is not a maze to navigate in alone. There are experts in funding instruments and budgeting to coach and support in preparing a solid project proposal.