Unless you’re a CPA or a CFO, you probably still utter a small internal groan when faced with coming up with a good grant budget. Grant writers are supposed to be wordsmiths, right? Well, yes, but…also competent with numbers.
If numbers aren’t necessarily your strong suit, or you’re a grant proposal newbie, read on. We’ve created a list of grant budget examples for you to draw inspiration from and to help you learn what to avoid. Let’s jump in.
What is a Grant Budget?
As the late, great fundraising guru Simone Joyaux once wrote, “Budgets are important because they allow people to have conversations based in reality.”
A grant budget sets forth, in detail, what the expenses for a particular program are expected to be, as well as any income.
Funders often analyze budgets with more scrutiny than they do your proposal. Why? They want to make sure they are investing in a credible and fiscally solid organization. If your budget raises more questions than it answers, it’s likely to raise eyebrows rather than establish trust. This is especially true when applying to a new funding source.
A grant proposal budget is more than just standard line items like income, revenue, assets, and profit (or lack thereof). A good grant budget gets into the weeds about program expenses, ranging from personnel to supplies, from mileage to cell phones.
Typically, a budget looks something like this:
Grant from the ABC Foundation
Benefits & Taxes
Social Security: @6.2% Medicare: @1.45%
2,000 miles @0.58.5/mile
Total Direct Expenses
10% of CEO’s time
Social Security: @6.2%
Water, gas, electricity, internet, garbage, sewer
Total Indirect Expenses
Some things to keep in mind when developing your budget:
Direct costs are the actual expenses of running a specific program. Typical direct costs include staffing, benefits, equipment, software, supplies, mileage, travel, postage, etc. All of these costs must be specific to delivering the program’s services. Think of direct costs like a departmental budget.
You can think of indirect costs almost as overhead. They can include a percentage of non-program salaries, maintenance, rent, utilities, IT expenses, accounting expenses, depreciation, and the like. Most funders prefer it if you keep indirect costs at or around 15%. For more about direct costs vs. indirect costs, check out this ultimate guide to grant proposal budgets here.
What Makes a Successful Grant Proposal Budget?
As mentioned previously, a good grant proposal budget is just as important—if not more so—as a clean, well-written grant narrative. Here are some of the things that go into creating a successful grant proposal budget:
Using SMART Goals and Outcomes
Just like your goals and outcomes, your grant budget needs to be SMART–Specific, Measurable, Achievable, Relevant, and Time-bound. This goes for both general operating budgets and program-specific budgets.
Being Transparent and Accurate
Make sure you use accurate spending categories. Include every budget category where your organization’s money will be spent. Don’t guesstimate.
Being honest about your expenses, as well as your revenues, is essential. Don’t fudge, and don’t do calculations in your head or on the back of an envelope. Have concrete proof of what you’re presenting in the form of your IRS 990 form and/or your audited financial statement. Many funders require these items as part of your full submission.
Following Funder Guidelines
Follow the funder’s guidelines to a “t”. If there’s an RFP, read it thoroughly. If the funder has a budget template, use it. If they require your state’s Common Grant Application form, then by all means, use it.
Simply Google your state’s name followed by Common Grant Application. The nice thing is they often include a Common Grant Report form, too.
Including the Right Costs
If you’re seeking funding for a new project, be sure to take into consideration all the expense categories, including hiring expenses, salaries and benefits, and any capital (equipment) expenses, as well as utilities and other indirect costs.
With salaries, you’ll need to estimate what percentage of each person’s time the program will consume. For instance, if your executive director has a salary of $85,000 per year and the program will take up 10% of his time, the amount of salary you’d allocate would be $8,500.
Don’t assume the funder expects you to operate on a shoestring. To raise money, you must spend money. Likewise, to run a successful nonprofit organization, operating on a shoestring can produce inefficiencies, burn-out, or unqualified hires.
Most funders are fine with up to 25% of the budget going toward administrative costs. When building your grant proposal budget, be honest about what you need to get the job done.
Keeping Things Simple and Clear
Make it easy for the funder to identify the amount you’re seeking.
In your revenues column, include “Grant from the ABC Foundation” and the amount. Yes, you’ve mentioned the requested amount in your cover letter and your proposal, but putting the amount you’re requesting into the budget ties things up neatly.
Allocate program and administrative expenses separately so your operations don’t appear to be “top-heavy”. Start with revenues first—and make sure revenues and expenses balance.
If you have a CFO or other individual responsible for budgeting, consult with them before building your budget—it’s important to be on the same page and to make sure your budget is as clear as possible.
Using a Budget Narrative or Justification
A budget narrative or justification is where you make it easy for the funder to understand exactly what you are requesting funds for and why. A good budget narrative will reveal the number of staff, whether they are full-time or part-time, a rationale for travel, and a clear explanation of why each expense is needed.
Not every funder requires a budget narrative, but it doesn’t hurt to include one. Just keep it clear and concise.
Click to find the best grants for your nonprofit from 12,000+ active opportunities.
This funded proposal includes an excellent example of a successfully designed grant budget. The revenue section includes the requested amount from the funder and demonstrates strong support from other organizations.
The long-form budget, found just after the project budget, clearly breaks down where funding from other sources will be applied and where the requested funding would be used.
Thanks to the Freedom of Information Act, the U.S. Department of Education provides a virtual reading room with many PDFs of successful funded proposals including budgets.
This proposal, on behalf of the University of Arizona, is a good example of a well-thought-out and clear grant proposal budget. While some portions of the budget are redacted for privacy, the budget summary on page 6 breaks out the various funding “buckets” over the project’s three years of operation.
Coupled with a well-researched and compelling narrative, as well as a thorough evaluation plan, it’s no wonder this grant proposal was successful.
MasterKey Ministries of Grayson County is a faith-based organization in Texas that offers nutrition and other education to low-income community members. They prepared an excellent and winning grant proposal along with a very clear budget seeking funding to expand its programs.
When it comes to the budget, the narrative makes perfectly clear what is being requested. The budget itself is excellently done, with clear amounts, clear descriptions, and an explanation of frequency. Take special note of how the budget monetizes the value of volunteer hours.
The Madison Community Foundation offers a downloadable grant budget template that is a great example of a clear, concise, and SMART grant budget.
Mistakes to Avoid When Creating Your Grant Proposal Budget
As avoidable as these mistakes are, they are nonetheless made quite frequently and can result in your application being rejected. Avoid these mistakes and raise your chances of securing the funding you seek.
Doing the Budget in a Hurry
Take your time doing the budget—it may take several days to get it right. You don’t want to rush and skip essential categories or have to beg the funder to submit a replacement budget. (Most won’t let you, anyway!)
Making Mathematical Errors
The last thing you want to do is make a mistake with your math. Instant loss of credibility with a potential funder! Spreadsheets are fantastic tools for creating a crisp, clean, and correct grant proposal budget.
Some people still do their grant proposal budgets in Word, but spreadsheets can help you avoid costly errors. Be sure your financial expert has a chance to review your calculations, as well.
Underestimating Future Costs
As 2022 is making painfully obvious, just because an item costs $X today, doesn’t mean that the price won’t continue to go up. Consider that the Consumer Price Index has risen to a record 8.5% in fiscal 2022 alone, and the cost of energy went up a staggering 32%—use this data to guide your budgeting.
The Proposal and the Budget Are at Odds
Sometimes the most successful grant writers tackle the budget first. This is to avoid the predicament of the budget not matching with the proposal’s narrative.
Once you’ve wrapped your head around how much a program is going to cost, you can jump into writing the grant proposal with clarity. Whether you do the budget first, or it’s the last thing you tackle, make sure everything in your proposal aligns.
Using Sloppy or Inconsistent Formatting
Sloppy formatting is off-putting, looks unprofessional, and makes it difficult for the grant reviewer to read your budget.
Align numbers to the right side of each column. Always use commas if the amount is five figures or up. Don’t include pennies–round up or down as appropriate. Consider numbering each item for easy readability.
Asking for the Wrong Amount
If ABC Foundation’s median gift is $10,000, don’t ask for $5,000. Likewise, if XYZ Foundation’s median gift amount is $2,500, don’t ask for $10,000.Instrumentl’s Grant Amounts section can help you determine how much to ask for.
Wrapping Up: Successful Grant Budget Examples
We hope you enjoyed our journey exploring grant proposal budgets and learned something new along the way.
Overall, use accurate spending categories (including direct and indirect costs), factor in inflation, triple check your math, and always include the requested amount you’re seeking. Review our examples of grant budgets for a refresher if need be.
Using a tool like Instrumentl helps you to not only identify potential funders, but provides you with guidance about ask amounts, median gift size, and areas of interest. Instrumentl’s features also allow you to manage multiple grants each step of the way in the grant life cycle. You can try Instrumentl free for two weeks.Just click here to get started.
Get grant writing best practices, step-by-step guides, and more delivered to your inbox weekly.
Grant writing advice, step-by-step guides, and more in our weekly newsletter.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
3k+ grant writers have already subscribed
Get Better at Grants Every Week
Be the first to hear about new free grant writing tips, workshops and ways to win more grants!
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.