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Estimating Unknown Staff Expenses for New Programs

When you plan for future work at your nonprofit organization, by definition, you work with unknowns. Budgets for new program staff are particularly laden with challenging to predict possibilities. How can you estimate these unknowns? What will your funding be like? The following techniques will help you to develop grants and other program budgets.

The first step is to determine which kind of unknown you are dealing with. Two types exist.

Unknown Unknowns.

The first type of unknowns involves staff costs for tasks that may or may not be required. In this case, list all the possible tasks. Then examine each. Is it likely? If this option happens, can you assume others will not? Group tasks with other likely-to-occur-together-tasks, then estimate the staff needed for each grouping.

For example, will your new program develop quickly and have a waiting list? If so, this will involve staff time to respond to inquiries and help process people. Or, will the program require a great deal of marketing and public relations? In this case, you will need help from your marketing people to create media buzz.

Positive: This type of planning moves you from confusing “what ifs” to a short list of the most likely possibilities. While not a perfect predictor, your organized analysis of possibilities helps you to identify different scenarios and plan accordingly.

Drawback: You are predicting the future with a lot of “ifs.”

Unknowns You Anticipate But Cannot Quantify:

The second type of unknowns includes items you anticipate, but you remain puzzled on how to estimate. The options below provide you with half a dozen ways to create sound estimates for these tasks.

Options 1. Log Time.

For this option, staff members record their program time in fifteen-minute increments. At the end of each month, they total the time spent.

Positive: This is an accurate way to determine the amount of time programs require.

Drawbacks: While time logs are useful for predicting ongoing programs, they cannot be used to estimate staff needs for untried programs.support

Option 2: Limited Time Log. For the next month staff logs their time.

Positive: This works best for routine tasks. For example, you plan to request support for a monthly newsletter. Since the application time frame allows, you ask the staff involved to log their time while creating the next issue.

Drawbacks: This is difficult to use with programs with uneven workloads, i.e., that occur once or twice a year.

Option 3: Estimate By Percent and Adjust For Reality

Estimate an amount based on the other work a person must complete, adjust it for what is known. For instance, since the Executive Director oversees ten programs, any one program requires about 10 percent of his time. From previous experience, you know that new programs require more. You assign the new program 15 percent and existing programs smaller percentages.

Positive: This works well for positions that provide oversight, like the executive director and the financial manager. It is less reliable for programs requiring extensive involvement of direct service staff.

Drawbacks: For positions with extensive involvement, it is little better than rolling dice.

Option 4. Use Your Imagination.

For this option you visualize three scenarios. The program-taking place under:

Best circumstances where everything flows smoothlycircumstances, where everything frustrates

Determine a time estimate of the staff needed to reflect each scenario and then create a composite estimate based on your insights.

Positive: This works well to estimate programs with many diverse tasks. It, also, helps you to identify other expenses associated with your programs, i.e., telephone and travel needs.

Drawbacks: Few, if you have broad experience with similar programs; more difficult if you do not.

Option 5: Research

Find other groups, via the Internet or through your associations, with a program. Interview them to obtain to determine an estimate of their staff costs.

Positive: An excellent way to estimate prices that, also, creates useful contact sources for future questions. Also, by referring to your research in your requests you will enhance your credibility with donors.

Drawbacks: It can be difficult to find others doing similar programs in a setting that resembles yours. For instance, after much searching you find an inner city program, but you anticipate your rural setting will have vastly different staff needs.

Option 6: Combination.

Use all of the above.

Positive: Offers the most information.

Drawbacks: Potentially, this is time consuming and some options, like using time sheets, may not be available.

However, you decide to estimate your unknown staff costs, takes notes on the steps you use. One excellent location for this is on worksheets, to right of the budget line item, outside the print area. You can use your notes to help with any budget inquiries and during program implementation.
Estimating unknown staff expenses for new programs can be a challenge. By using the options above and keeping notes, you can create realistic staff estimates for your future staff needs.

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