FINANCIAL PLAN

Before embarking on a major project, a financial plan is a requirement. A project

financial plan — also known as a project budget — identifies all of the costs associated
with a project. These costs are then tailored to fit within the financial resources available
for a particular project. Once complete, the project financial plan provides an outline of
what can be spent on each area of the project to ensure it remains on budget. A
financial plan does not need to be complex, but there are a few key things to know
before creating one.
Part1
Preparing to Create Your Financial Plan Download Article
1.

1
Understand the top-down approach to project budgeting. There are two
approaches to creating a project budget. The first is known as the top-down approach,
and this refers to projects where the total allowable cost is known before the project
begins. The project budget must therefore be within those costs.
 For example, assume you own a construction business, and a large
organization approaches you to see if you can enlarge their parking lot. They
may tell you that they have $500,000 to allocate to the project, at which point
you need to decide if you can do it or not. [1]
 In the top-down situation, you would need to create a budget that costs less
than $500,000.
2.

2
Understand the bottom-up approach to project budgeting. The bottom-up approach
is the alternative to the top-down approach, and this refers to figuring out what every
part of the project will cost, and then adding it up to determine the total.
 If a customer approaches you to re-build a parking lot, and asks for a quote,
you could use a bottom-up approach. You would consider everything that is
necessary for the project, and then determine the total cost.
  In this case, you determine the cost of the project by figuring out what every
piece will cost and then calculating a total. In the top-down approach, the cost
is determined by available resources, and you must work within those limits.
3.

3
Choose the approach for you. Sometimes, you may not have a choice, and you may
need to work within the confines of somebody else's budget (meaning you would need
to use a top-down approach). Other times, if you have full control over a project, you
can select an approach.[2]
 The advantage of the top-down approach is that it ensures a project is
completed within available resources. If your organization has $1 million to
spend on projects for a year, you can state that the new parking lot
construction project must be done for under $500,000. These limitations can
lead to efficiencies and the reduction of waste.
 This approach is useful if you have limited resources. Similarly, if you are
running a project, it allows you to dictate to all the parties involved how much
they are allowed to spend. This can keep costs down because each party will
not be creating their own budgets.
 The bottom-up approach is useful because it can be very accurate. Without
any immediate limit, you, or your employees can cost the project based on
what the project needs. If you are constructing a new parking lot, you may task
each member of your team to come up with the budget they need. The major
con is this approach can lead to run-ups in cost.[3]
4.

4
Discuss the needs of the project with key stakeholders. Regardless of the approach
you choose, you will need to discuss what the project will require with key project
members. Knowing the needs of the project can allow you to determine what the costs
of the project will be. This is called the "scope" of the project and it defines the
requirements and limits of the work to be performed.
  For example, assume you have been approached to construct a parking lot for
a large organization, and they have allowed you to cost the project (or provide
an estimate). Your first step will be to discuss with them what their needs are,
and what their timelines are.
 They may say they need a new lot with 100 spaces be constructed within three
months. You may then survey the site to realize that you will need to cut down
trees, blast rock, and then construct the new lot.
 From this, you can determine you will need planners to design the lot, people
to blast and cut down trees, and construction workers to build the lot.
Part2
Creating your Project Financial Plan Download Article
1.

1
Determine your core costs. These are the absolutely essential costs to complete the
project. Core costs would include things like labor, equipment, and materials. The bulk
of any projects costs will come from these key components.[4]
 If you are constructing a parking lot, you will need laborers to do the work, and
contractors to assist/plan the project. You will need materials (like asphalt,
wood, paint), and you will need equipment (tractors, jackhammers, etc).
 If you know the timeline for the project, this helps in scheduling resources and
expenses. For example, if the project is three months, you know you may need
to pay labor for three full months, as well as rent any equipment for that period.
 You can determine costs by consulting with your team and contacting
suppliers. If it is a large project, you can ask your construction foreman what
specifically he needs in terms of labor, material, and equipment. You can then
contact suppliers for quotes and choose the most appropriate quote.
 You will also need to determine any legal or owner-established limits. For
instance, what is the legal minimum wage, and what is the minimum wage you
will offer for the different types of work? What are the legal requirements when
it comes to scheduling, and are there any additional rules you wish to establish
(such as no weekend access to the site)?
2.
2
Consider non-core expenses. Many projects go over-budget because they forget to
include non-core expenses. Think very carefully about all the things outside of labor,
materials, and equipment that you may need. Consider things like any required travel,
insurance, legal advice, accounting advice, fuel, food/drinks, and extra
telephone/internet bills.[5]
 Make sure to put a number to each indirect cost. If you need to estimate,
always assume it will be on the higher end rather than on the lower end.
 To determine costs, consider how long you will need the good/service, and
what its price is. For example, if you need to set up internet at the work site,
you know you may need three months of internet at $100 per month.
3.

3
Add a reserve to help reduce your risk. After your direct and indirect costs have been
added up, consider adding extra money to your total costs just in case your cost
estimates were too low. In addition, often times projects are delayed, issues occur, or
items cost more than was initially planned.[6]
 How much you choose to add depends on how accurate you think your budget
is. If many aspects of your budget needed to be estimated and could not be
confirmed, consider adding 5 – 10% as a reserve.
4.

4
Create a table to record your costs. The final aspect of a financial plan is to record all
your information. To do this, you can open up Microsoft Excel or any other table
creating program, and create a table with four columns. From left to right, they would
state: Expenditure, Cost, Running Total, and Notes.
 The expenditure column would list the name of the expenditure. For example,
Tractor Rental, or Construction Laborers.
  The cost would indicate how much the expenditure cost.
 The running total would indicate the total cost up to that particular point. For
example, if the first row had a cost of $10, and the second row had a cost of
$10, the running total in the second row would be $20.
 Notes would include any special things to remember about the expense.
 While you can consider labor as one category, it is generally better to break
labor down by the tasks performed and the wages paid. For example, a welder
or the foreman of a crew is usually paid more than a laborer. So you may wish
to group the construction laborers together in one expenditure category, plus
categories for the foreman, specialists (this could include the welder),
consultants, etc.

Creating a Project Budget – A Complete Guide

A project without a budget is like a car without fuel. Funding is essential to get the
project started and set all resources in motion. If you work in a project-based company
as a manager, creating a project budget and helping those wheels spin will most likely
be your full responsibility.

What is project budgeting?

Before we jump to the ins and outs of creating a project budget, let’s define what a
project budget is in the first place.
The budget for a project is the combined costs of all activities, tasks, and milestones
that the project must fulfill. In short: it’s the total amount of money you’ll need to finish
the project that should be approved by all the stakeholders involved.

You start creating a project budget during the kickoff phase of the project and continue
monitoring it till the project reaches the finish line. A meticulously planned project
budget is the holy grail of the new service economy where scaling smoothly and
sustainably is critical to company survival.

Why a project budget is important

There are at least three reasons to explain the importance of having a project budget
plan.

First, it’s an essential part of securing project funding. The numbers will tell
stakeholders exactly how much money is needed to button up the project and when the
money is needed.

Second, a well-planned budget provides the basis for project cost control. Having
an end budget estimate helps you measure the project’s actual cost against the
approved budget and see how much costs you’ve burned already. It will give you an
understanding of how the project is progressing and if any changes need to be made to
the plan.

Third, a project budget has a direct effect on the company's financial

viability. When calculated feasibly and with resource constraints in mind, a project
budget will increase the operating margin and improve overall project success.
 Project cost category Example

Human resources Salary rates of full-time and temporary workers

Travelling spendings Anyone who travels from one location to another to do

project work (including budget for meals and lodging)

Training fees Conferences, workshops, outside contractors

Material resources All the items your team might need to perform the
work, including software, equipment, or other unique
materials

Research expenses Studies or data to support your project and deliver the
best value

Professional services Legal advice, consultants, market research firms, etc.

Capital expenditures Equipment or technical upgrades to complete the

project

Contingency reserves Contingency funds to allow for flexibility and reduce

risks of budget overruns, usually 5-10% of the budget

Now that the purpose of a budget is clear, let’s switch to the mechanics.
Typical project cost categories

Planning project costs is an essential step in mapping out a project budget. To do so,
you’ll need to create a list of timely line items that are relevant for the project. Here’s a
table with common project cost categories to help you get started:

Some of the costs, such as training costs to teach users to use a product or
maintenance costs, are often overlooked by managers, so it’s important to think ahead if
there are costs related to the project that will come up once it’s complete.

Approaches to estimating a project budget

We all know that it can be extremely challenging to estimate the size and cost of a
project, since a project by definition is unique in nature, often a new product, service or
business change. The greater the size and complexity of the project, the harder it can
be to do this properly. Here are five techniques that can greatly improve the project
estimation process and accuracy:

Bottom-up estimation

Rate the individual parts of the project plan and tot them up

Bottom-up estimation is one of the best and foolproof ways to prepare a project budget.
It anticipates estimating individual parts of the project, such as tasks, milestones, or
phases, and totaling them to get project cost. This method can be applied if you’re at
the point of creating a statement of work. If you’re sure you know every grain of the
project, bottom-up estimating is the way to go.

Forecast has got a complete suite of tools for bottom-up estimating and planning. Better
than any template, the Scoping page offers functionalities to break down the project
by milestones and tasks. Fill in the rate cards for each role, and get the platform to
calculate project cost for you automatically. 

The downside of the bottom-up approach is that it takes plenty of time to go down to the
smallest detail of the project. Additionally, our in-house research has shown that 71% of
tasks are created after the project’s start date. In reality, project requirements change
even before the ink is dry on your statement of work. Also, because it’s very granular, at
some point you might suffer from inflation affecting the cost of your estimates.

Since project estimation is a process, the estimate will always undergo several
iterations of refinement throughout the project’s lifespan. The estimation accuracy will
thus improve as the project scope is more thoroughly understood. This also means that
the uncertainty will lessen the further the project progresses towards completion.

Top-down estimation

Figure out the total, and then split it into tasks or milestones

Top-down estimation is opposite to the bottom-up approach mentioned above and a

completely different ball game. It starts with the project budget total and involves
breaking it down into smaller chunks. Top-down estimation is typically used when you
have a fixed price project with the budget set in stone.

The main disadvantage of this approach is loose estimations at the project initiation
phase. It is difficult to accurately predict the budget before you understand the scope of
work and have a project plan. This process might turn very challenging, especially when
you can’t measure the accuracy of the initial quote against final project delivery.

Top-down approach can cause misalignment between the selling and the project teams.
Consider the following scenario:

The Account Manager sells a Honda, the Project Manager scopes out a Ferrari. The
problem isn’t that the AM is bad at selling, or the PM bad at scoping projects, it’s that in
way too many companies the right hand doesn’t know what the left is doing. The PM
only sees a lump sum assigned to the project budget, without enough context as to why
it’s set that way.
The key to success with top-down estimation is having a clear understanding of how
each task in the scope affects the initially set fixed price, which takes forever to
calculate manually. Forecast, however, makes it very easy. Besides being a huge help
in bottom-up estimations, the platform’s Baseline caters for top-down planning. You can
see early on when there’s just no way to line up the price with the expectations.

Through Baseline in Forecast, you can see the prices set for each stage of the project,
and use that to quickly create a rough project scope that can be profitable at that price
and still fulfill the customer’s vision. Learn more here: 

Analogous estimation

Analyze the data in similar projects to decide the cost

If you’re not totally new to project management, you’ve probably managed a few
projects before and can tell what works and what doesn’t. Using analogous estimation,
you would rely on the budget data and best practices from your previous projects to
form an opinion about how much the current one could cost the client.

Analogous estimation can sometimes be a back-and-forth task, but why not do it the
smart way by using project management software? In Forecast, you can easily
duplicate one of the past projects to create another one with the same tasks. Then in an
instant, you can adjust it to make a better, more situational estimate. Another way to
use analogous estimation is to rely on Auto Schedule that has an algorithm which
learns from past projects and can be applied to estimate tasks, predict the delivery date,
and determine the project budget. 

There are always similarities between projects, but it doesn’t mean that you should
make decisions based solely on them. Every project is unique. In case you haven’t
managed projects before, you can often find usable examples with a quick search.

It goes without saying that analogous estimation is not as accurate as other techniques
like bottom-up estimation. But the advantage of analogous estimating is that it’s super
quick and is especially useful when there’s limited information about the project.

Parametric estimation

Using data and project variables to suggest the total

In contrast to analogous estimation, parametric approach is more accurate. It takes cost

variables or data points from specific parts of specific projects and applies them to the
current project, so you make more decisions based on data.

The advantage of this process is that it’s more accurate than the analogous estimation
because it employs more than one data set and uses the statistical relationship between
historical data and variables.

The disadvantage is that with digital projects it’s often hard to find useful data points.

Three-point estimation

Take the best, worst, and most likely case estimates to do the average

Three-point estimation is one of the most sensible and pragmatic techniques as it takes
into account a weighted average based on the best, worst, and most likely case budget
scenarios and encourages you to think from multiple perspectives. Thus you can figure
out a realistic cost estimation.

The upside of the three-point estimation technique is that you can reduce the risk of
going over budget, as it will be indicated in your plan, and eventually deliver on
expectations.

There are no substantial disadvantages of three-point estimation. Sometimes it takes

longer to create a budget using this approach, but at the end of the day, it’s worth the
effort spent.

Check out these Project Estimation Techniques 101 for a more detailed perspective.

How to create a basic project budget in five easy steps

You can use project budgeting methods above, or stick to a simple project budget
planning routine. Essentially, these five steps can help you put the finances together
and create a project budget summary:
 1. Break down your project into tasks and milestones. Working with your task
list will give you an understanding of what you’ll need to accomplish and help you
with project cost management. If you already have a task list, that’s fine, and you
can start right off. But if you don’t, start creating a scope and writing down
everything that your team needs to do.
2. Estimate each item in the task list. Now it’s time to give each item that you’ve
written down an optimistic estimation. At this point, identify all the resources and
materials you’ll need to perform well and include them into your estimate when
calculating the price.
3. Add your estimates together. This is probably one of the easiest parts of the
project budgeting process, especially if you have a spreadsheet with two
columns: Tasks and Costs. Then, you’ll be able to calculate the total fast.
4. Add contingency and taxes. Better safe than sorry. Of course, you can’t be
100% confident about the final estimate, as things change all the time. By adding
contingency and taxes, you make sure that the project doesn’t go over budget
and your estimate number is closer to the final costs you eventually spend. If you
don’t know how much contingency to add, project management
experts recommend going for 10% of the total.
5. Get approval. Talking to your manager to approve project costs would be the
last thing in the project budget creation process. 

Automating project budget creation

You've just seen the simple industry-standard option. But if you start creating a budget
for the complex project sticking to the above points, you'll notice that it only helps to
rough out a number without knowing if it's feasible or not in the end. And one question
still remains: How do I assign a cost to each task? Tricky and not even close to being
easy, isn't it?

Luckily, there's also a way to automate project budget creation using Forecast - without
going through the hassle of most of the points above. Forget about adding costs to
tasks manually. The only thing that you need for starters is the task list and your team
members' rate cards and internal hourly cost specified in the system.

 Rate cards - a number reflecting how you trade your employee’s hours to the
client on a specific project

 Internal hourly cost - the hourly rate you pay your team members

As long as you have these, you're good to go. Here are five simple steps you need to
follow:

1. Scope out a project with milestones and tasks.

2. Hit the Auto Schedule button and Forecast's AI will estimate tasks, assign
resources, and suggest a deadline for the project end date, creating a solid
project plan and doing all the scutwork for you.
3. Take a look at your timeline. Below, you'll see how the new project affects your
employee's workloads in the heatmap. Adjust it if any changes are needed in
terms of resource allocation.
4. Apply Auto Schedule, go back to the Scoping page, and enable the filter Plan
Price. Voila - you've got your budget estimated.
5. After that, if necessary, go to the Budget page (available as part of the Premium
plan in Forecast) to add expenses or simply a markup percent to account for
unexpected costs.
This is the fastest way to create a realistic project budget and it saves you a lot of time
on unnecessary administrative work. Here's a sneak peek into the platform to show you
how you one budget example: 

In case you're not interested in using Auto Schedule and prefer to estimate tasks and
assign resources manually, Forecast will calculate the budget anyway, based on your
estimates, rate cards, and internal hourly cost of your employees. 

Learn from the experts: The best budgeting practices

Basics aside, it's time to learn from the experts. Project managers have lots of budget
responsibilities, so we’ve talked to experienced project leaders and researchers. Below,
they share their best practices and things to count in when creating a budget for a
project.  

Taoufik Samaka, Doctorate Researcher at Toulouse Business School:

Many budget slippages come from not taking the project risks seriously. Therefore, I
would recommend a discussion with the risk manager to go through all eventual risks
and potential opportunities, evaluate them by probability (likelihood to happen) and
impact by value (if the risk happens, what would be the impact on the project in
monetary value?). Also, evaluate the different strategies to handle the risk (accept,
avoid, transfer, mitigate, exploit), define mitigation activities, reserve a contingency to
handle your risks that are to be addressed. Project managers need to re-evaluate the
risks on a regular basis and update the budget accordingly. A methodic risk
management approach would help you cover risks related to all project process groups
(most importantly: scope, schedule, cost, quality, resources, stakeholders).

Marco Donoso, IT Project Manager:

Besides using an appropriate estimation technique, like bottom-up, it is generally

recommended to consider “contingency reserves” for known risks, and “management
reserves” for unknown risks. So, for the first one, it is enough if you do good risk
management by focusing only on risks that really matter and need a response plan. For
the other one, it would be enough if you assign a % according to your company or
business. For example, global companies usually put 5% for that.

Rogerio Manso, Senior Project Manager:

To budget a project it is critical that the project manager has clarity on three points.

 Project scope: It should be very clear about customer expectations to avoid any
scope changes throughout the project.
  Resource availability: One of the biggest causes of budget failure is due to poor
planning of resource availability. Holidays, illness, layoffs, resource
replacements, working on multiple projects at the same time always have an
impact on the budget.

 Risks: As already mentioned, it is important to pay close attention to risk

management. No project is free of risks and impacts on budgets.

Finally, it is important to have good control of the project plan so that deviations are
fixed quickly and not to have a major impact on the final budget.
 

Cassandra Mack, Senior IT Leader:

Take the time to find out who the "missing" stakeholders are. They are the ones that
never hear about the project until later on and are indeed key to either getting
something done or knowing where the bodies are buried that will cost you money, time,
or some kind of resource tax later on in the project if you don't know about it upfront.
You want to eliminate as many of those surprise eaters of contingency as possible.
Don't be lazy with the risk management process. If you are lazy, you will end up eating
your management reserves and will have to go back to the well to beg for money later
on.  

Don't be afraid to chunk the project into phases. You can't realistically budget for any
known issues/risk farther out than the reasonably foreseeable future (depending on
your line of work and forecast capabilities). If you are forced to do a multi-year budget,
then add a confidence level for the pieces that are further out so you can quantify how
much and what quality of data you have on hand. Chunk it up and you'll get better
budget estimates and be able to adjust as you go with reasonable certainty.
 

Neil Woodger, Global Transformation Leader:  

Ensure that you have very strong requirements and that they are fully agreed and
signed-off. Scope creep is the biggest eater of the budget as a project moves forward.
 

Charles W. McBride, Project Leader:

Step away from the budget, sleep on it for a night, and take a hard look at each of those
numbers again when you are fresh, asking a simple question: What did I/we miss?

We all miss something at one time or another, sometimes it’s big, sometimes it’s small.
Strive to take the appropriate amount of time to always double-check all of your
budgetary assumptions. Your reputation and your blood pressure will thank you later.
 

A checklist of things to create a project budget

There are many factors to take into account during a project budgeting process. Make
sure you can answer the following questions: 

1. Can I define the project and its end goal? 

2. Are there any ground rules, constraints, and assumptions I should consider?
3. Do I have sources of data (Task List, WBS, Cost Estimates, Schedule) to rely
on? 
4. Is the estimating methodology in use acceptable?
5. Do I know who is going to work on the project? 
6. Do I have a list of resources and their rates to complete the project? 
7. Can I compare my estimate against the best practices industry standard? 
8. Do I have contingency reserves to account for risk? 
9. Who are the key project team members to help me in estimating/budgeting
process? 
 10. Am I on the same page with Project Stakeholders? 
11. Can I compare the budget with original estimates and reconcile differences?

How intelligent automation can help 

As you can see, the budget is an important part of planning and controlling your project.
While you can manage to create project budgets manually, you’ll be more precise using
project management software with budgeting features, especially if it’s a large project
with tons of milestones and dependencies you’re running. 

Project management systems like Forecast would calculate the budget for you based on
the scoped out project. As soon as it’s approved by stakeholders and you have the
Statement of Work defined, everything’s ready to start working. A scoped out project in
Forecast is not just the recipe of your project full of tasks and milestones. It's also the
scope that takes into account how long your previous projects have taken you and the
roles you need to conduct the project.

The software learns from your previous projects and lets AI help you estimate each task
and create a solid project schedule. All in one, the platform ensures you have a more
precise project scope and a more precise budget in the end.

Forecast's premium plan will provide you with a visual budget that has a fast overview of
revenue, cost, and profit and enables you to see how the time entries and invoices
affect the budget and spot if you are on track or not.

EVALUATION TOOLS
 Did it Work? 5 Tools for Evaluating the Success of Your Project
What Is Project Evaluation (and Why Should You Do It)?

A couple of decades ago, funders handed out checks without worrying too much about

whether the awardee really achieved the goals they’d set for themselves.

Today, that’s rarely the case. Most foundations care a great deal about whether their

money was well spent, and they often require some form of evaluation to determine

whether your approach worked, and how it could be improved.

This is not necessarily a bad thing. In fact, it’s probably a good thing to be held

accountable for the good works you’ve envisioned, and for the money entrusted to you.

It’s a positive thing to have tangible proof that your organization is working well:

such proof will make it much easier to raise money in the future. And if your
organization is not as successful as you’d hoped, it’s helpful to actually know where the

problems lie, and how best to fix them.

Choosing How to Evaluate Your Project

Evaluation can be a simple, do-it-yourself process, or a full-scale, professional study.

The choice of how to evaluate a project or program is usually determined by:

 The scope of the project: A tiny one-day event doesn’t warrant big-time

evaluation.

 The funding source: Some sources, particularly large foundations, will tell you

what kind of evaluation they want to see.

 Your needs: Do you need to prove a concept? Show outcomes to raise money?

Or just satisfy your curiosity?

 Your resources: Do you have an evaluator on staff, or the funds to hire someone

out of house? Or are you a shoestring operation?

If evaluation is built into the funding for your project, you’re all set. All you need to do is

ask for proposals, pick the one you like best, and pay the bills. Your evaluator does the

rest.

Most project evaluations, however, are do it yourself projects that require some careful

planning and thinking. As project evaluator, you’ll need to understand the tools used to
conduct evaluations, so that you can select the most appropriate tools for your particular

project.

2 Kinds of Evaluation Tools

Quantitative Tools

Tools come in two groups; the best known are quantitative tools, which measure how

many, how much, how big, and so forth. Quantitative tools allow you to say things like

“500 people attended our event,” “200 people got jobs as a result of our program,” or

“grades improved by 20% because of our tutoring services.”

In some cases, quantitative tools are all you need, because your project has simple,

measurable goals, and your nonprofit CRM has got all the. numbers you need.

Typically, these are the straightforward projects that aim to lower or increase

something easily measured. For example: increase grades; decrease addiction;

increase employment; decrease homelessness.

Did it work? To find out, just measure rates within your target audience before and after

your program was implemented. Quantitative tools include basic, well known methods

such as:

 Head count: How many people attended?

 Testing: Pre and post tests to see how many more correct answers attendees

could get after participating in your program.

  Data analysis: What percent of people who attended your program graduated,

increased grades, became employed, etc.

 Comparison: How many came to the events before your outreach project; how

many came after your outreach project.

Qualitative Tools

More interesting and complex are Qualitative tools, which allow evaluators to measure

intangible things like awareness, attitude, and appreciation.

These measures are used to evaluate projects with goals like “participants will

appreciate the importance of textiles as a tool for exploring culture and history” or

“participants will become more fully aware of the importance of diet and exercise in

maintaining good health.”

While it may seem impossible to actually measure such intangible outcomes, there are

tools for doing just that kind of evaluation. You’ve probably used or at least heard of all

of them. They include:

 Surveys. Typically, surveys are carefully crafted tools that allow you to take the

pulse of a group of people before the start of a project, and then again after the

project is completed. Surveys can measure almost anything, from prior and post

knowledge of content you’re teaching to attitudes, preferences, achievements,

self-esteem… you name it. When you survey your intended audience, you’re

setting the bar for success. If your post-program survey shows improvement,
 you’ve done what you set out to do. Surveys can be conducted in one of several

ways: electronically (using online systems like SurveyMonkey), with paper and

pencil, or through a person-to-person interview. Electronic surveys offer the great

benefit of being easy to distribute and easy to tabulate, but users may share

limited information. Paper and pencil surveys are a good way to start a program

that requires participants to show up, sit down, and engage in a classroom like

situation. Interviews are versatile and flexible, and may gather a good deal of

information, but they are time consuming and expensive.

 Observation. How do you know that youngsters are more interested in fine art

after a workshop than they were before the workshop? One way to find out is to

observe the group prior to and after the workshop. Using a stopwatch, you can

compare the amount of time they spend in front of individual works. Listening to

conversation, you can hear which words they use to discuss and describe the art.

You can also note body language: are they zipping past the works? Stopping to

look? Pointing and discussing? All of these observations are data points to help

you assess outcomes.

 Case Studies. Your nonprofit is running a program that prepares unemployed

individuals for job placement by crafting resumes, building interview skills, honing

business skills, and providing career-appropriate clothing. Each week, dozens of

people go through the program. You know that X number are getting jobs – but
 you don’t really know which part of your program is most useful, or how clients feel

about their experience. One way to find out is to conduct a series of case studies,

in which you choose representative individuals and study them in depth. In the

end, you’ll come out with transcripts of interviews, pre- and post-test results, and

other data to help you tell the story of how several unique individuals arrived at

your door, experienced your program, and either succeeded or failed in reaching

their goals.

 Focus Groups. Your youth development program helps teens improve grades,

build self esteem, get involved with community service projects, and learn study

and workplace skills. You have lots of participants, but you really don’t know how

those participants’ attitudes and abilities changed as a result of their experience.

To find out, you might run a focus group. A focus group usually consists of 3-5

individuals who, together, represent a cross section of your target audience.

Through directed, open-ended questions, you can learn a great deal about how

they perceive and are impacted by your program before it begins, as it runs, and

after it ends. Focus groups are typically “facilitated” by someone with specific

experience, recorded, and transcribed.

 Interviews. Have you ever walked into a museum or zoo and been accosted by a

person carrying a clipboard who asks whether you will answer a few questions? If

so, you’ve seen the interview process in action. Typically, interviews are used to
 gather marketing information (who is coming, why are they coming, what are they

coming for, are they satisfied, etc.) – but interviews can also be used to assess

knowledge, interest, and so forth. For example, a museum might interview visitors

to find out what they already know about the Impressionists, what they might like

to know, which Impressionists they prefer, and so forth. That sort of information

can provide a baseline for later comparison.

Whatever your project or your budget, there are tools available to evaluate your level of

success. When you use those tools, you improve your ability to make a case for

support, write a compelling annual report, or sell donors on your capital campaign. You

also gain critical information for refining your program, and you build a database of

knowledge for developing new programs and projects for the future.