Chapter 4: The Dollars and Cents of Proposal
Writing
Think of writing and implementing
proposals as a type of contracting business.
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Moursund, D.G. (2002). Obtaining resources for
technology in education: A how-to guide for writing
proposals, forming partnerships, and raising funds.
Copyright (c) David Moursund, 2002.
Section Headings for Chapter 4
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Think of writing and implementing proposals as a type of
contracting business. As a Resource Seeker, you decide
whether to "bid" on a particular job. That is, when the
opportunity to write a grant proposal presents itself, you
must choose whether to participate in that particular
opportunity or wait for a better one.
There are two major costs associated with the proposal
business--the cost of writing proposals and the cost of
implementing the proposals that are funded. It can cost a
great deal to write a proposal. And if you write a winning
proposal, you then face the task of actually carrying out
the work you proposed. This mail entail expenses above and
beyond those provided by the grant.
This chapter examines proposal writing from both a
business and a cost/benefit point of view. The types of
analyses discussed in this chapter can help you decide
whether to compete in a particular competitive grant-writing
situation.
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The Costs of Proposal
Writing
It takes resources to prepare and submit a proposal. If
the proposal is funded, it takes resources to carry out the
project.
To illustrate, suppose you are going to write and submit
a proposal to a particular funding agency. Based on an
analysis of the situation, you decide that it will take
about 20 hours of your time to write the proposal. In
addition, there will be expenses of $100 for postage,
printing, phone calls, travel to a research library, and
other miscellaneous costs. You estimate that your time is
worth $25 per hour. Using this hourly rate, the completed
proposal will represent a personal investment of about
$600.
A simple budget is given in Figure 4.1. You will notice
that a spreadsheet was used to create this budget.
Obviously, such a simple budget is readily done by hand; it
is a good idea, however, to learn to create and use
spreadsheets to do budgets. They are a versatile and
powerful aid to writing proposals.
Figure 4.1. Budget for writing a proposal.
Figure 4.2 illustrates four different categories of
grant-writing situations. In category A, for example, there
is a high probability of a grant being funded, with the cost
of actually producing the proposal being quite low.
Figure 4.2. Four categories of grant-writing
situations.
Consider the following scenarios, which correspond to the
four boxes in Figure 4.2. In each case, your budget for
writing the proposal would be $600.
- In Situations A and C, the proposal will go to a
company that will award $10,000 worth of computer
hardware and software to each winner.
- Situation A: The company will fund one proposal
from every school submitting a well-written proposal
that adheres to the proposal guidelines.
- Situation C: The company will fund one proposal
from each state. Any school is eligible to submit a
proposal.
- In Situations B and D, the proposal will be submitted
to a federal agency that will award a grant of $10,000 to
each winner. However, the federal agency will expect a
winner to provide 30 contact hours of free, hands-on
computer training to at least 50 teachers. The winners
will also be expected to provide these teachers with free
handout materials and refreshments at coffee breaks.
- Situation B: The federal agency will fund one
proposal from every school submitting a well-written
proposal adhering to the proposal guidelines.
- Situation D: The federal agency will fund the best
proposal from each state. Any school in the nation is
eligible to submit a proposal.
Situation A is great! For $600 worth of proposal-writing
time and materials, your school will receive $10,000 worth
of equipment.
But what about Situation C? Suppose you live in a highly
populated state that has more than 4,000 schools. Many are
likely to submit a proposal because they really need the
equipment. Is it worth your effort to write a proposal when
there is only a small chance you will be funded?
Situation B is a little more complex than Situation A.
You are guaranteed to win if you write a reasonably good
proposal. But then you will need to design, organize, and
implement an extensive teacher inservice class. You will
need to recruit 50 teachers who will volunteer their time to
participate in the inservice training. You will need to find
an appropriate computer lab that has the needed facilities,
and you will need to provide the handout materials for the
training. This can probably be done for less than $10,000
worth of time and materials. Thus, you may well decide to
pursue this grant opportunity.
Situation D is likely to be a loser. It probably is not
worth investing $600 in preparing the proposal because the
likelihood of winning is quite small. Of course, if you know
that few, if any, schools in your state intend to submit a
proposal and you will able to write a really superior
proposal, this situation becomes more like Situation B.
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A Brief Look at an
Implementation Budget
The ability to quickly create a rough draft of an
implementation budget for a project is an important skill.
The financial information in your draft budget is critical
in helping you decide whether to write and submit a
proposal.
Implementing a proposal involves two types of
costs--direct and indirect. Direct costs are the funds the
Principal Investigator (PI) or Project Director has
available to do the work specified in the proposal. Indirect
costs (often called overhead) are funds made available to
the PI's organization to cover costs incurred for common or
joint objectives, which cannot be readily and specifically
identified with a particular grant project.
For example, suppose you are a university faculty member
and have written a proposal to fund some research. Your
proposal asks for money to cover your summer salary and
support two graduate research assistants (GRAs) for a
12&endash;month period. These are direct costs in the grant
proposal.
You and your student assistants will use, for
grant-related activities, the university library, accounting
office, computer facilities, office space, and innumerable
other resources the university provides. The university has
negotiated an indirect cost rate with the federal government
to cover the cost of items not listed in the direct costs
section of a proposal. Typically, indirect costs are based
on percentages of various types of direct costs. Figure 4.3
shows the sample budget for your project.
Figure 4.3. Sample budget for a faculty research
project.
This simple example illustrates two important points.
First, notice that your proposal includes a budget for your
summer salary at $9,000, which includes medical, dental, and
retirement benefits. The $9,000 certainly looks like a very
small amount when compared to the total budget of
$64,400!
Second, notice the indirect costs. If this proposal is
funded, the university will receive $14,400 to cover the
indirect costs. You can see why the university strongly
encourages its faculty to write grant proposals!
The actual overhead rate for organizations varies
considerably. Some research organizations have an overhead
rate in the 50% to 100% range. Other organizations, such as
a school or school district, may have an overhead rate under
10%. Some funding agencies limit the percentage of overhead
charges, and many funding agencies do not allow an overhead
charge. This is particularly true of private foundations.
Their expectation is that the organization submitting the
proposal will contribute its overhead charges as part of its
contribution to the overall project.
Now, let's make a change in your proposal. Suppose you
will submit the proposal to a federal program that limits
the size of grants to $50,000. Awards will be made on the
basis of the quality and quantity of research that will be
completed. Thus, to have a chance of being funded, you must
make a commitment to completing a considerable amount of
research.
How might the budget be cut to $50,000? Here is where a
spreadsheet is very useful. With a spreadsheet, you can
easily do some "what if?" experiments. It might occur to you
that you would be willing to work for free during the
summer, just to have the graduate assistant help and the
allocation for travel, materials, and supplies. Figure 4.4
gives the resulting budget.
Figure 4.4. Proposed budget with no summer
salary.
Notice that a new column has been added to the proposed
budget. In-kind contributions reflect contributions being
made by the Resource Seeker to the project. Notice also that
even with this generous contribution on your part, the
budget still is not balanced. However, a small reduction in
the travel, supplies, and materials would bring the total
budget down to $50,000.
As an alternative, you might decide to cut out one of the
GRA positions. Obviously, this cut is too large. Also, you
need the student help. Therefore, you add back in some
student wages (at a far less expensive hourly rate than a
GRA) and produce the proposed budget given in Figure
4.5.
Figure 4.5. Budget with one GRA and hourly
help.
You now have a budget that meets the requirements. Is it
worth your while to write and submit the proposal? Do you
really want to do all that work--and commit yourself to the
research work you will describe in your proposal? Perhaps
the method of decision-making analysis suggested by Figure
4.2 is not adequate in your situation. The next two sections
present another mathematical approach to analyzing the
situation.
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Mathematical
Expectation
It is impossible to develop an exact science that will
tell you when and when not to submit a proposal. However,
you can do some estimates and develop a mathematical
computation that will provide you with useful information in
making the decision.
We begin with a simple lottery-like example. Suppose that
a "scratch and win" game has five spots where you can
scratch off one spot to reveal a message. You know that one
of the five messages says, "You win $5.00," while each of
the rest say, "Sorry, you lose." How much are you willing to
pay to play this game?
A mathematician would likely tell you that you should not
pay more than $1.00. You have one chance in five of winning.
That is, your probability of winning is .20. Your
mathematical expectation is .20 times $5.00, which is $1.00.
If you pay $1.00 to play the game, and you play many times,
you will probably come close to breaking even (winning or
losing a small amount). If it costs less than $1.00 to play
the game and you play many times, you are apt to come out
ahead. If it costs more than $1.00 to play the game and you
play many times, you are apt to lose money.
The overall situation is summarized in the mathematical
expectation table in Figure 4.6. It lists each possible
outcome from playing the game once when you pay $1.00 to
play, and it calculates the overall mathematical expectation
for the game. The computations were done in a spreadsheet,
although such a simple computation is readily done by hand.
In spreadsheet notation, a negative number is placed in
parentheses. Thus, the ($0.20) in cell E4 (column E row 4)
represents -$0.20.
Figure 4.6. Analysis of simple "scratch and win"
game.
The $.80 amount given in cell E3 of Figure 4.6 is .20
times ($5.00 - $1.00). Each of the -$0.20 entries is .20
times ($0.00 - $1.00). The total mathematical expectation in
this game is the sum of the first five numbers in the far
right column. The meaning of the $0.00 total mathematical
expectation is that you would expect to approximately break
even if you played this game many times.
Now let's complicate the situation a little. Suppose that
one of the five scratchable spots says, "Congratulations,
you win $5.00. However, you must go to the radio station to
pick up your $5.00." The other four spots say, "Sorry, you
lose." Now, how much are you willing to pay to play the
game?
Suppose you estimate it will cost $2.00 worth of gas and
wear-and-tear on your car if you happen to win. (And, of
course, it will take quite a bit of your time to drive to
the radio station. However, we will ignore this cost in this
particular example.) The table in Figure 4.7 analyzes the
situation. Again, a spreadsheet was used to do the
computation. Notice that the spreadsheet is similar to the
one given in Figure 4.6. Cell D3 was changed to $3.00 (that
is, $1.00 + $2.00). The spreadsheet software did the
calculations.
Figure 4.7. Scratch and win, but it costs to
collect.
The meaning of the -$.40 total mathematical expectation
computed in Figure 4.7 is that on average you will lose $.40
per play if you played this game many times.
Notice that four rows of the table in Figure 4.7 are
identical. This makes it possible to shorten the table, as
illustrated in Figure 4.8.
Figure 4.8. Shortened form of table in Figure
4.7.
The second lottery game example is closely related to
writing a grant proposal. There are some costs involved in
writing a proposal and there are costs in carrying out the
work of the proposed project if you win. Thus, you need to
think about the cost of writing the proposal, the
probability of being awarded a grant, and the cost of
carrying out the work if you are awarded the grant. This is
illustrated in the next section.
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Applications of
Mathematical Expectation
Suppose there is a Request for Proposals (RFP) from your
state's department of education. A proposal can request up
to $100,000 for computer hardware and software to create a
teacher training center. If a school district is funded, it
must, for three years, provide free half-day workshops for
at least 300 teachers per year from districts that do not
receive grant funds. And, of course, it is expected that the
teacher training center will be heavily used to train
in-district teachers.
This is a competitive grant situation. The state has
budgeted $500,000 for this project, so it expects to fund
five centers. You check with the state department of
education and find out it is expecting about 250
applications. After additional dialogue with the state
department you learn that the participants from outside the
district will be responsible for their own transportation to
the training sessions, but the project must provide them
with free instruction, materials, refreshments, and so
on.
You begin your analysis of this grant situation by doing
two things:
- Preparing a budget estimating the cost of preparing
and submitting a proposal. For the purposes of this
discussion, suppose that you figure this at $2,000.
- Preparing a rough draft of a budget for the proposal.
Let's say your request will be for $100,000 worth of
hardware and software and you estimate a cost of $30 per
participant to provide the workshops to the
out-of-district teachers. Thus, the total cost of
providing this required service for three years will be
$27,000 (that is, 300 x 3 x $30).
Figure 4.9 contains the total mathematical expectation
analysis of this grant situation. Notice that your cost if
you win the grant competition is $27,000 + $2,000 = $29,000,
as shown in cell D3. Your probability of winning if winners
are selected at random is (5/250), or .02.
Figure 4.9. Analysis of teacher training center
proposal.
You might conclude from the analysis in Figure 4.9 that
it is not worthwhile to submit a proposal. From a pure
mathematical expectation analysis, this is a lottery-type
situation with a negative mathematical expectation.
However, your school district might still decide to
participate in this RFP for a variety of reasons. For
example, district officials may believe that the only way
the district will ever get the hardware and software to
train its own teachers is to "be lucky" in such a grant
situation. Or it may be that your school district has an
excellent grant writer who is four times better than pure
chance in such a competition. That is, instead of a
probability of 5/250 (pure chance) of winning, you estimate
that your school district has a probability of 20/250 of
winning (Figure 4.10). This leads to a positive mathematical
expectation.
Figure 4.10. Analysis of "good grant writer"
situation.
The mathematical expectation ideas discussed in this and
the previous section are intended mainly to get you to think
more deeply about the grant writing "business." Many people
think that grants are a source of free money and other
resources. They fail to take into consideration the human
efforts in writing and implementing the grants proposals.
They also fail to take into consideration that the grant
"business" is often very competitive. As discussed in the
next section, the competition may well come from
organizations that are highly skilled in writing and
implementing grants.
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Making a Living in the
Proposal Business
Many people make a living writing and implementing grant
proposals. This is a common occurrence in a research
university. It is also a common occurrence in non-profit
research organizations that are not affiliated with a
university. When you write a proposal, you may be competing
with individuals or teams of individuals who make their
living writing and implementing grants.
Suppose you want to make a living writing and
implementing proposals. How much of your time will you spend
writing versus implementing proposals? The question becomes
more complex as your goal becomes one of supporting both
yourself and a team of people, such as a research group.
You might wonder how a person can be supported on grants
and have the time to write proposals. It is standard in the
proposal business to assume that a person in a full-time
equivalent (FTE) position works 240 days per year, 8 hours a
day. This is a total of 1,920 hours of work, or 48 weeks at
40 hours per week. (Actually, one FTE requires somewhat
fewer hours of work than this. You are not expected to work
during the traditional holidays. Thus, one FTE represents
perhaps 46 weeks of work.)
Most people who support themselves in the proposal
business put in far more than 40 hours a week. Suppose, for
example, that you routinely work a 48- hour week. This means
that you could devote an average of 8 hours a week to
proposal writing while spending 40 hours a week on
implementing the proposals that pay your salary.
Eight hours a week is a significant amount of time. Over
the course of a year, this totals about 400 hours. If you
are really good at proposal writing, you might be able to
write four proposals in this amount of time. Probably you
will be writing multiyear proposals. Thus, your typical
proposal might be for $200,000 to be spread out over three
years. If about one-fourth of your proposals are successful,
you could conceivably support yourself and a small research
team with this level of proposal-writing effort.
Most people who make a living writing and implementing
proposals are really hard workers. They tend to average 50
to 60 hours of work a week. They tend to work on some
holidays. They tend to take short vacations. Thus, they can
easily devote 40 hours a week to their grant-supported work
and still have 10 to 20 hours a week (or more) to write
proposals, study, explore new ideas, and otherwise expand
their horizons. As they work on their current projects, they
are always thinking about future projects.
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How Long Does It Take to Write a
Proposal?
It is difficult to estimate how long it will take to
write a particular type of proposal because the answer
varies tremendously depending on your experience in writing
proposals, your speed as a writer, your speed in creating
budgets, and other factors. In addition, the first proposal
you write on a specific topic will likely take much longer
than your second proposal on the same topic.
Figure 4.11 shows some very rough estimates of the time
it takes to write various types of proposals. These
estimates are for a relatively skilled and experienced
proposal writer who has considerable knowledge in the
content area of the proposal.
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Type of Project Proposal
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Size of Proposal
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Hours to Prepare
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Modest-sized research,
development, or implementation proposal to the U.S.
Department of Education or National Science
Foundation
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$50,000 a year for 3
years
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120 to 150 hours. (The NSF
estimates 120 hours. Literature from the U.S.
Department of Education provides a much lower
estimate.)
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Large-scale implementation
proposal to the U.S. Department of Education or
National Science Foundation
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$1 million a year for 5
years
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1,000 to 2,000 person-hours. The
NSF has awarded some $50,000 planning grants to aid
in writing proposals for $1 million a year for 5
years.
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Very large-scale implementation
proposal to the National Science
Foundation
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$1 to $3 million a year for 5
years
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2,000 hours or more. The NSF has
awarded a number of $100,000 planning grants to
sites eligible to apply for the Urban Systemic
Initiative Program.
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Modest-sized implementation
proposal to a private foundation
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$10,000 a year for 3
years
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30 to 50 hours
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Large-scale proposal to a
private foundation
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$1 million to $5 million or
more
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500 person hours of writing
effort and lots of personal contact time with
foundation personnel.
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Preliminary proposal
(small)
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Under $10,000
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3 to 5 hours, plus a lot of
careful thought
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Preliminary proposal (large)
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$100,000 and up
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10 to 20 hours of writing effort
and a medium amount of personal contact time with
foundation personnel.
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Figure 4.11. Estimated times required to write
various types of proposals.
You should view a proposal-writing effort as a learning
experience and as a step toward writing the next proposal
and the next proposal. The time and effort that goes into
writing a proposal is not necessarily wasted, even if the
proposal is not funded.
Many proposal writers underestimate the time that it
takes to write a good proposal. Thus, as the deadline looms
them end up putting in very long days, and they often
produce a sloppily written proposal. When you were a
student, you may have had the same experience in doing a
major term project. There is relatively little value in
submitting a proposal that receives a "grade" of B or lower.
Typically, funding goes only to those proposals that are
ranked at the A, or perhaps even only at the high A level.
If you are not willing to put in the effort to write a very
high quality proposal, then it usually is not worth the
effort of writing a proposal!
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Proposal Mills
The term proposal mill is sometimes used in a
somewhat derogatory sense to refer to an organization that
derives most or all of its income through grants. There are
many research organizations or research and implementation
organizations of this sort. They vary in size from a few
employees to hundreds of employees. Often these
organizations are also interested in contracting to do
specific research and/or implementation tasks. They may even
be "for-profit" companies rather than nonprofit
organizations.
These research and implementation organizations have
staffs highly skilled in writing proposals and in
implementing the funded proposals. Sometimes these
organization specialize in a narrow area, such as research
in special education. Larger grant-supported organizations
have staffs with a wide range of interests and may seek
funding in a broad range of areas.
These research and implementation organizations are truly
in the proposal business. If such an organization has
survived for a few years, you can be quite sure it has some
staff members who are exceptionally good at proposal
writing. The organization also has to be quite good at
carrying out projects. Its record of accomplishment must
look good to people who are evaluating its proposals.
Being in a grant-supported business is not a great deal
different from being in other businesses. In essence, the
organization is bidding on jobs--much like a contractor
might bid on various jobs. If the organization is good
enough at writing proposals and carrying out projects, and
if its prices are competitive, it will prosper.
Of course, this makes it tough on beginners. Beginners
tend not to have the finely honed proposal-writing skills of
veterans or the staff support that is so helpful in proposal
writing. They may lack skill in building implementation
teams. For these reasons, a few federal funding agencies and
private foundations have special programs only open to
beginners, or that support only quite small grants that are
not of interest to people who are trying to make a living in
the grant business.
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Activities
- Have you ever written a proposal or helped write a
proposal? If so, describe the proposal and estimate how
many person-hours of work it took to write. If possible,
determine the cost of writing the proposal and analyze
this with respect to its size.
- Select a proposal you might be interested in writing.
Briefly describe the project. Based on your current
knowledge of proposal writing, do a cost/benefit
analysis. Make estimates whenever you are not sure of
amounts of time or costs per hour for developing the
proposal or carrying out the work.
- Interview one or two people who have had significant
experience in writing proposals and implementing
grant-supported projects. One of the questions you should
ask is how they decide whether to respond to a particular
RFP. Report on your findings.
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