Budgeting
"What's your budget?" is a key question whether your project takes place in the United States or overseas. From exchange rates and foreign taxes to legal advice and insurance, you'll want to ensure your program's budget accounts for costs that are rarely a part of domestic projects.
Program budgets are in U.S. dollars, but many transactions occur in local currency. Review exchange rates often so that you are aware of and can prepare for the impact of significant fluctuations and consider revising your budget closer to award stage or implementation. If you're receiving a donation or funding from a non-U.S. source, clarify whether the amount will be calculated in U.S. or foreign currency.
You may need to calculate salaries and fringe based on the local market rather than the typical Harvard salary grades and fringe rates. Depending on your staffing plan, your project may also incur staffing costs beyond employees' base salary and fringe benefits. These costs could be more than the salary of your staff, so it's important to budget accordingly and plan for these assumptions.
If you're shipping or hand-carrying technology, information, currency, or tangible goods across borders, you may incur duties and customs brokerage fees.
Overseas activities may need additional—and sometimes local—insurance coverage. For example, most countries have mandates regarding insurance coverage for vehicles.
Many international programs require in-country legal counsel or other professional services, especially if you're not working with a local partner. You may have consulting expenses during the set up phase (e.g. researching local tax requirements) as well as ongoing expenses (e.g. paying an accounting firm to manage these requirements throughout the life of the project).
Depending on your location, you may need to budget for physical security for lodging and office locations, transportation and travel security, and access to medical care.
Although Harvard is tax-exempt in the U.S., this exemption doesn’t automatically carry over to foreign jurisdictions. Program revenue, donations, payments, and international fund transfers may be taxed, and rates of 25 to 35 percent are not uncommon.
Ensure you've planned enough trips to allow for appropriate oversight, especially if you’re managing the project from the U.S. Consider the usual travel expenses (e.g. flights and hotels), and those unique to international travel (e.g. immigration fees and vaccines).
If your travel is paid for by Harvard, consider using one of Harvard’s preferred travel partners, such as The Travel Collaborative, Egencia, or Milne Travel to book your trip. If there’s a high likelihood your itinerary could change, consider purchasing refundable tickets and/or travel insurance as budget allows. Know what your contracts and agreements with any in-country partners may allow, and what their payment deadlines and refund policies are.
When operating in a less familiar location, unexpected costs are practically a guarantee. While you may be able to plan for foreseeable events that can cause program disruption (e.g. weather patterns and political elections), you also need to be mindful of unpredictable costs (e.g. emergency funds for disasters or attacks). If allowed by your funding source, have a contingency budget for these less foreseeable events. If it's not allowable, be prepared to draw on other unrestricted funds or potentially revise the program activities to stay within your original budget.
We can review your budget and help you estimate the costs applicable to your program. Consult with us early in planning for your project, and we may be able to suggest solutions that can help you avoid unexpected costs and delays.