How Much Should Monitoring and Evaluation Really Cost?

Talking about money can be the hardest conversation in social impact work; nonetheless, it is necessary. Remember our last blog - Why M&E Needs More Than Leftover Funds - we talked about the risks of inadequate funding for M&E, and the stakes are high, but that still leaves the question of how much is really enough?

In this blog, we will focus on projectized budgeting, but this could also inform the development of budgeting mechanisms for organizational M&E development.

We ran a poll on LinkedIn asking, "What percentage of the total project budget should be allocated to M&E?" and 72% of respondents chose less than 20%. From the answers given and other readings, the percentages vary, and if preset, they are normally prescribed by donors.

Using percentages to determine a budget can feel tempting to rely on, but the reality is, you have to work from real numbers, and there is no one-size-fits-all - the 5% applied to one project cannot simply carry over to the next. So where do we really go from here?

We propose that, while you keep those percentages in mind as reference points when creating your budget, you do not stop there. Figuring the cost for M&E can be either working from an equation to answer or answer to equation. In the social development space, projects are often donor-funded, and donors get to decide the exact figure/percentage allocated to M&E activities, but in other cases, you will have to come up with a figure yourself. In either case, the figure proposed cannot be arbitrary - budgets are big determinants of what you can or cannot do; therefore, the defence of your budget must be in the calculation of it.

Here is what you will have to ask:

• Is the budget provided by the donor adequate/realistic to cover the scope they are asking for? If not, is there room to negotiate a reduced scope or an expanded budget?

• Is the budget I am creating in line with the expected scope of M&E? What information will I base my costings on?

In this blog, I am cautious about including prescriptive numerical figures, but what I know is helpful when creating a budget is knowing what to consider and how to cost it, which is the aim of this blog. Here is what to consider:-

Human Resources Costs

Your budget must account for the people who will implement the work plan activities. The size and composition of your M&E team must be determined in advance, as they can affect compensation and pricing. Consider this: is your M&E team in-house salaried employees, contractors/consultants, or a mix of both? Each of these is treated differently in terms of compensation and work expectations. Adequate staffing is necessary to deliver quality M&E. Given the scope of work, payment arrangements must reflect the scope and expectations. Here's what you can do:

• For internal employees: check with the Human Resources department whether team members' normal salary will be their only compensation, or whether there are allowances for project-based compensation, overtime, and the like. This will give you real figures to work with.

• For consultants and contractors: try to get estimates at market rates, or use historical financial information for contractors/consultants. Get an idea of hourly/daily rates, fixed fees, etc.

• Remember, personnel are paid not only for what they know but also for how long it takes them to execute. Understanding how much time it takes to complete a task will help you calculate the cost relative to the scope. Timing affects cost, and cost affects timing.

Doing this research will help to strengthen your budget arguments and give you real numbers to manage expectations.

Fieldwork Cost

The field is where work really is set in motion, and the budget line items really start to show. It is important to note that the methodology you choose will be a major determinant of what you will need to budget for. For example, depending on your data collection method, if it is heavily dependent on human labour, then Personnel cost may increase; if not, it may be reflected in the cost of your tools. Nonetheless, we spoke about human resources earlier, but in the field, there is much to consider. Here is a table outlining some other field matters your budget must consider:

Fieldwork Cost	Things to budget for
Data Collection Equipment & Supplies	Paper-based Collection tools (Printed Papers, Writing tools, File holders, etc.), Electronic Collection Tools (Phones, Tablets, Recorders, chargers, cameras, WIFI, data storage)
Accommodation and Transportation	Cost associated with traveling for fieldwork activities- Fuel, Tolls, Vehicle Rentals, Public Transportation, Airfare, Driver allowances, Lodging
Training	Costs related to training fieldworkers: training venue, refreshments, stipend, training materials, and trainer fees.
Field Engagement	Cost related to hosting data collection activities like Stakeholder meetings and FGDs - venue, refreshments, and incentives.
Miscellaneous/Administrative	Administrative costs and unplanned expenses while out in the field.

It is important to note that all M&E fieldwork is not the same - some being more extensive than others, depending on methodology. The list provided is a broad overview of major fieldwork costs and is not exhaustive. It is instructive to remember that the work required for monitoring is different from the breadth and depth required for evaluation. These distinctions are important to make when budgeting.

Technological Cost

In the previous section, we briefly discussed technology; however, it is important to zero in here, as digital technology has become crucial to the effectiveness and efficiency of monitoring processes and is known to save time and reduce costs. The investment in technology to support monitoring requires you to analyze the depth of work required and the system you have or will need to support it. Budgeting for technology can range dramatically, so consider the following questions:

• What technologies do you currently possess and will require, but have a cost to use? What is the cost?

• What technologies do you require but do not have and will need to procure? (This is where you need to retrieve estimates for procurement, payment process (e.g. Software - is it a one-time, subscription-based, pay-per-user). Remember to compare suppliers and check for free resources.

• If unable to fill technological gaps in-house, will you outsource tools & capacity? If so, what could that look like, and how much would it cost?

So how much should M&E really cost? I can't give you a magic figure; as with all budgets, it depends on context, scope, and available funding. The questions in this blog are designed to guide you to the numbers that will help you understand the cost. So next time, before you give a figure, make sure you run the numbers and defend them with evidence.