How to calculate the EU project budget (part 3)
In my previous post I wrote about how to structure your idea into EU project proposal language (Aims, Goals, Outputs, Activities). Within this post, I will continue and show you how to prepare the EU project budget.
Let’s continue with our example from the previous post. We defined 7 intellectual outputs (specific for Erasmus+ projects) and activities (for each IO).
Calculating staff costs
For the purpose of this example, I have chosen Erasmus+ structure for defining a budget because it is quite easy to understand. E+ projects reimburse costs based on units (days of work, number of participants, flat rate for project management...) and actual costs(subcontractors, special needs). Unit costs and special needs costs are covered 100%, exceptional costs are covered 75-80%. The total budget for E+ project vary; for example, up to 450k€ and up to 3 years (Key Action 2 / Strategic partnerships), up to to 1M€ (Knowledge Alliances) or even up to 4M€ (Sector Skills Alliances, lot 3). See the programme guide for the details.
Let’s take a look at the proposal form what it expects from us in the terms of budget:
There are several main cost categories: Transnational project meetings, Intellectual Outputs (IO), Multiplier events, Training activities (travel, individual support, linguistic support, Exceptional costs for expensive travel), Special needs costs, Exceptional costs and Project management costs.
For now, I will focus only on how to calculate staff costs for our project.
The cost of producing our project IOs is based solely on the defined number of days and daily rates of employees. The daily rates are pre-defined and country-specific. It doesn’t matter if you have a bigger actual daily rate, this is all you will get reimbursed.
Staff costs are further divided into the categories: 1. manager, 2. teacher /trainer /researcher /youth worker, 3. technical, 4. admin. Daily rates per countries are the following:
The first approach to budgeting - try out your luck
The main challenge we have to solve now is to (gu)estimate the number of days needed to produce the IOs. If you’re the professor of guesstimation™, you could just insert some numbers that look legit directly into the PDF form. Well, why not? There is always a chance to convince the evaluator, who will probably cut your budget anyway.
If you’re the professor of guesstimation™, you could just insert some numbers that look legit directly into the PDF form.
Luckily, the application form (PDF or online form) automatically calculates the budget as soon you enter the partner, IO, staff category and the number of the days (section I.3):
(turn on subtitles to see the explanations and HD mode if the video is blurry)
The second approach to budgeting - detailed guesstimation
Instead of using ‘over the thumb approach’ and hope for the best you can support your cost claims with a more detailed planning. I prefer calculating the budget based on detailed activities using, for example, ProjectLibre (a free MSProject clone). It is still guesstimation but on a more detailed level.
Calculating the budget using ProjectLibre is easy as a bean soup:
- Copy-paste previously defined IOs and activities (find them in my previous post) into the Gantt-chart. Indent the activities (nest them under IOs):
2. Define the previously mentioned 4 types of the resources (manager, researcher, technical, admin).
3. Assign resources to each activity.
4. Estimate the effort of each activity.
5. Design the sequence of the activities. Connect the dependent activities within the Gantt-chart.
6. Add resources (staff) for all partners.
7. See the ‘WBS chart’ and other ProjecLibre reports to get the budget per IO.
8. Finally, insert the estimated effort from ProjectLibre into the E+ form.
Why would you bother with detailed activity planning?
Firstly: to convince the evaluator the budget is realistic and solid.
Secondly: What if you actually win the project? Then you’ll have to coordinate the partners from various countries, with different attitudes towards work and responsibilities, with different seniority level and rank within their organization etc.
Without the detailed activities plan, a project can become a nightmare. Been there, done that :)
This article is a part of mini-series for EU project managers and proposal writers:
Part 3 (this one): How to calculate the EU project budget