Crafting the perfect proposal accompanied by a justified budget with a clear narrative explanation requires clarity and a step-by-step process. And if you’ve been asked to write a proposal and to create a reasonable budget to support your request, it’s possible you might be wondering how much to ask for in a grant and where to even start.

Don’t worry, below we will explain just how to know how much to ask for in a grant and how to easily create the perfect budget that funders want to see in your grant proposal.

What is a Grant Budget?

Essentially, funders view a budget as the estimation of revenues and expenses related to the program, activity, or project you seek funds for.

In order for a grant to be successful, your grant proposal must include both a narrative description of your organizations’ activities and financial justifications to explain and support your request.

For grant writers, preparing a budget plan for grant proposals can be a bit challenging, and it is not as simple as writing the goals and objectives of your proposal.

While funders may also ask you to provide them with your organizational budget (all the financial resources needed to run your nonprofit), the grant budget is the detailed description of the costs of the specific program you are seeking funds for.

A grant budget must include the estimated costs of all the items essential to conduct the activities (equipment, personnel/salaries, fringe benefits, rentals, travel costs, contracted work, materials/supplies, matching contribution, etc.) you are proposing to the funder.

Your grant budget must be as reasonable, concrete, and specific as possible to show the funder how you will spend their money wisely. 

It is often required in the grant budget to illustrate the total cost of the project compared to the financial request for the specific funder who will cover only a portion of the program's costs. So don't be surprised if you are asked to report all the other sources of revenue that support your program; many funders simply don’t want to be the sole supporter of your activities and want to make sure you can count on diversified and sustainable streams of revenue for your nonprofit.

There are a variety of budget templates and grant budget examples available that you can review for inspiration and guidance! Sometimes funders will even require you to fill out their own preferred template, downloadable from their website or portal.

Here is an example table you may find useful for creating a high-level grant budget.

Overall, the most important thing to remember is that the grant budget has to be clear and understandable!

3 Factors When Figuring Out How Much to Ask For in a Grant

Well, now that we know what a grant budget is, let’s focus on how (and how much) to ask for, all while staying aware of the crucial factors that need to be considered. 

These main factors include researching the funder’s requirements, creating a detailed budget without accounting errors, and showcasing the ability of your nonprofit to efficiently secure, manage, and account for grant money.

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Factor 1: Research the Funder's Requirements and Preferences

The most common mistake one can make is to overlook the funder’s requirements and guidelines for the “size” of the grant request.

When selecting the funders that fit your nonprofit’s needs, check that what they funded in the past aligns with what you are proposing. And don’t underestimate the importance of figuring out how much the funders awarded to your peers for projects that are similar to your own in your field of specialty.

This will help you know how much to ask for and to make sure that your request is not either below or above their usual trend.

The most important takeaway here is that you must be knowledgeable of the history of giving and preferences for the funders you selected.

Powerful tools for nonprofits such as Instrumentl can help you find out how much to ask for in a grant based on historical giving from a funder.

As you can see in the image above, the median grant is $4,000 and most grants fall under $15K in value; knowing this information would allow you to make a more appropriate ask when submitting your grant proposal.

Using Instrumentl, you can also examine trends for where the funder has given the most over the last three years. In the example below, you can see how environment and education projects have been very important to this particular funder based on their funding history.

Instrumentl also provides you with key trends from the funders’ 990. 

This information will allow you to analyze high level trends about a funder within opportunities presented in the Matches tab.

Although funders sometimes may be willing to award grants that are “unusual” considering the amount disbursed in the past, be aware that it is more often the exception than the rule.

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Factor 2: Provide a Detailed and Accurate Budget

We cannot emphasize it enough: make sure that your budget includes all of the costs to cover the different elements of your program in a clear, realistic, and reasonable manner!

Grants budgets should match your program objectives and include a description of the financial resources you need to carry out the necessary programs.

You will also need to write a narrative description of your grant budget that perfectly explains the numbers you propose, makes logical sense, and has no errors.

If all of your numbers add up and your description is crystal clear, you are good to go!

Here is our step by step approach:

1. Do your homework

Research all you can concerning your funder’s guidelines, preferences, and history of giving, including what they don’t fund! And before submitting your budget, make sure all of your numbers add up with no errors!

2. Be compliant with the funder’s request

Get familiar with their budget templates/forms and their reporting requirements.

Understand what the funder is actually looking for in your grant and get prepared to read through the lines!

3. Make sure the budget is fine tuned to the narrative

Your budget has to align with your nonprofit (mission, vision, organizational background) and your specific program (local need, population served, staff, activities, outcomes, etc). And you also have to create a narrative description of the budget itself to explain and justify the reasonability and necessity of the estimates you included.  

4. Explain (numerically) your why

Detail each cost to show the funder what their money will be used for and always include a description of all the other resources that support costs not covered by your grant request. 

Almost all budgets have a section for revenues and expenses that demonstrates that you have secured most (or all) of the needed funds for your nonprofit. This section gives your program or project credibility because it implies that other organizations are willing to invest and trust in you!

5. Create a budget that shows the funder’s ROI

See your funders as investors. It is important for them to maximize their return on investment (ROI) by supporting organizations that deliver the highest value in terms of social outcomes over the long run. 

Generally, the return of the investment is provided by the ratio of the expected project gains (in terms of value provided) by its costs. Make it clear in your narrative description that the benefits of your project outweigh the costs!

Factor 3: Display Organizational Viability and Legitimacy

When considering your grant application, funders will ask themselves these kinds of questions: will the nonprofit be able to effectively use the grant funds? Do they have a strong track record of awards? Do they have financial and accounting policies and systems to track funds and measure outcomes?

Funders love to see balanced budgets both in projected revenues and expenses, as well as a description of your successful history in managing past grants.

To do this, you will be asked to provide a list of past or current grants your nonprofit has been awarded (and manages) to prove you are accountable.

For instance, if your annual budget shows higher revenues than expenses, specify what you will use the extra funds for. Will the money be kept as reserve to face unexpected challenges? Will it be used to create a new program or expand an existing one?

Showcasing your integrity and transparency by using available funds in the most efficient way is crucial. Provide a clear annual and program budget accompanied by a narrative description of your procedures for accountability and effective funds oversight. 

As mentioned earlier, funders also want to be shown that your organization has a variety of additional streams of revenue for running its programs. This data will demonstrate your wisdom in managing funds and running your nonprofit in a sustainable way. 

Based on these observations, a new nonprofit may have to make its way a step at a time through smaller grants and volunteer support until its history of programs becomes more established.

Wrapping Things Up: How to Know How Much to Ask for in a Grant

In this article, we have shown you that knowing how much to ask for in a grant is a skill that can be mastered!

Since your grant budget is a core component of the proposal, make sure to find a way to prove that your programs make a difference. Always remember to be aware of the most common grant amount awarded by the funder, to provide a clear description of what you will do with the funds, and to illustrate the impact of your program on the community you serve. 

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