What Is a Grant Budget Proposal?

A grant budget proposal provides a clear and accurate outline of a program or project, its costs, and its eligibility under the grant the business is applying for from a particular institution. The grant budget is an essential portion of any budget proposal as it informs the grant funding entity where the person requesting the grant intends to use the funding. While a compelling written justification of the funding request proves to be of significant value, a comprehensive and structured budget paints a clear picture of the intentions of the entity requesting the grant. A high-quality grant budget proposal increases the likelihood of approval and makes it easier for the organization to run the program knowing a clear outline of how much they can spend, helping them prepare an accurate grant report with ease when the funding agency asks for the document. Writing a grant budget proposal is similar to creating an operational budget for an organization. An operating budget details the expected income and expenses for the following year, and a grant budget outlines associated costs for a program that needs funding for a set period.

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Components of a Grant Budget Proposal

Estimate budgets of a grant budget proposal refer to the financial plan for all the possible expenses of a project or program. The budget for the grant proposal must demonstrate and serve as a comprehensive plan for the grant funders and the entity, whether an individual, group, or organization, to use the money for both operational aspects and miscellaneous expenses of the project. Make sure to create the budget according to the guidelines provided by the funding body. However, the major elements of the grant budget comprise two broad categories, namely direct and indirect costs.

Direct costs: Direct costs are one of the most critical parts of the budget of a grant proposal. These types of incurred expenses are solely to execute the project or program. It includes expenses for personnel, materials, equipment, consumables, and travel expenses. Direct costs have further subcategories in terms of occurrence, which are recurring and non-recurring expenses. Personnel expenses refer to the salaries and allowances for the human resources working on the project with a structured budget per the guidelines of the funding agency. It includes site managers, project managers, project assistants, associates, technicians, developers, and other roles necessary for project execution and completion. Labor and materials constitute the majority of direct costs, and the grantee can accurately estimate expenses through two methods: the last-in, first-out method or the first-in, first-out method. Traveling expenses constitute incurred costs to attend team meetings, joint conferences, team workshops, and training programs relevant to completing certain tasks of the project. Some funding agencies also allow international and domestic travel. Make sure to indicate travel expenses for accurate data collection, project surveys, and visits to relevant institutions. Recurring expenses refer to variable costs that may keep occurring throughout the project. For example, a research grant budget for recurring expenses includes items such as glassware, consumables, diagnostic kits, photocopies, communication, survey questionnaires, and other charges. It also includes allowances for participants in the research study, food budget, and medical expenses. Non-recurring expenses refer to one-time expenses and do not happen in regular intervals. It includes materials and equipment like computer programs, accessories, software, and hardware necessary to complete the project. Indirect costs: Indirect costs extend beyond the expenses that the entity incurs when creating a product or providing services to include the costs associated with maintaining and operating a company. Indirect costs, or overhead costs, are the ones that are left behind after computing for direct costs of the project. They are not direct attributes to the expenses of the program or project. Rather, they act as supporting items to ensure the project runs smoothly. Indirect costs include items such as electricity and water bills, memberships, certificates, permits, accommodation charges, and administrative expenses, among others. Roughly 5 to 15 percent of the grant budget classifies as overhead costs, credited to the agency funding the project. However, the situation varies depending on the guidelines and funding institutions themselves.

What Is a Grant Narrative?

Grant narratives for a budget are supplementary documents to the grant budget proposal that provides space for the individual or organization asking for the grant to explain the process of computing the grant proposal, especially the budget and expenses that expands the description of each item of the budget line, sharing additional funding sources for the planned project. While the grant budget paints the grant funding in numbers, the narrative extends on the given information, providing context and meaning. The budget narrative starts with each component or category of the grant budget, providing additional explanation and justification for incurred items. The grant budget lists expenses as personnel or materials; the narrative provides an opportunity to indicate more detail in describing and supporting these items. Budget narratives also justify costs in each expense category, providing clear explanations of their necessity to the success of a project or program. The section below explains what a narrative looks like for each category.

Personnel: List each position according to titles and employee names, if available. Indicate their annual salary rate with the percentage of time spent on performing the project. The compensation for employees in performing grant activities must show consistency with employees working for the organization. Fringe benefits: These refer to the base fringe benefits on known costs or established formulas. These apply only to listed personnel for a percentage of time they work on the project.Travel: Itemize the travel expenses for projet personnel according to purpose, like final interviews, staff training, and group meetings. Indicate how to calculate the expenses. In training projects or programs, list the travel and meal expenses separately for each individual. Show the number of trainees and unit costs, identify the travel location, indicate the travel policies for each location, and if travel regulations apply.Equipment: Indicate the non-expendable items for purchase. These items are tangible property with a life span of two years and above with acquisition costs worth five thousand dollars and more. Indicate expendable items in the supplies or other category. Analyze the cost benefits of purchasing versus leasing equipment. Write if items are leased or rented in the contractual category with an explanation of their necessity, and describe the procurement process for the items.Supplies: List all items according to type and indicate the process for calculating these expenses. Generally, supply items include any materials that are expendable or consumed during the project or program. Construction: More often than not, construction costs are not allowable. Minor repairs and renovations are allowable on a case-to-case basis. Make sure to check with the funding agency for budgeting costs. Consultants or contracts: Indicate whether the grant budget follows the organization’s formal and written policy and procedures or the Federal Acquisition Regulations. For consultant fees, enter their names, if available, their provided services, hourly or daily fees, and estimated times on the project. In terms of consultant fees, list all the expenses that the grant funding agency in addition to their fees. Contracts, on the other hand, describe the products or services procured by the contract while providing an estimated cost. If the costs exceed a hundred thousand dollars, there must be a separate document to justify sole-source contracts.Other costs: The section details the list of items, like rent fees, reproductions, telephone bills, security services, or confidential funds, according to their type and the necessary calculations for the costs.Indirect costs: Indirect costs are acceptable if there is a federally approved indirect cost rate and the attached copy of the rate approval. If there is no approved rate, the individual or organization that requires the funding can request from a federal agency that reviews the required documents and approve a rate.

How To Write A Grant Budget Proposal

Preparing the budget for a grant proposal is one of the most critical aspects of the grant writing process. The budget tells the funding institution the estimated amount that the requesting body needs to complete a project. In all aspects of business, budget plans are essential for implementing different programs and ensuring that it becomes successful. The section below details the different steps you can follow to write a comprehensive grant budget proposal.

  • 1. Review the Grant Guidelines from Funding Agencies

    Before you start writing the grant budget, make sure that you read and understand the grant proposal guidelines provided by the funding agency. You must show knowledge in understanding the primary requirements of the grant. Be sure to look at eligibility requirements that detail a list of characteristics of the preferred awardee. The eligibility requirements can be according to geographic location or type of industry. Areas of funding refer to particular projects or operational expenses that the grant agency funds. Close attention to this section as it allows you to write a targeted proposal for the intended use of funds. Grant writers also consider the grant amount, aligning it with the project goals and needs. Granting agencies also list particular limitations for funds, paying particular attention to allowable uses and specific limits. Refrain from sending requests for funds that are not allowable expenditures or are outside the scope of the grant.

  • 2. Identify the project costs

    Take the time to research the most accurate amount of expenditures for the project. Create a team to conduct cost analysis on time and cost estimates. As much as possible, it is advisable to provide exact amounts, providing you with the confidence to execute the project successfully while being within budget. Remember that if the expenses go over the indicated budget, it is your responsibility to shoulder the additional costs for the project. Never estimate or guess cost figures. It will be much easier to justify these amounts in the budget narrative. The more accurate the figures are, the easier it is to receive the grant.

  • 3. Indicate the Projected Revenue

    Many funding agencies like to see that their funds are not the only exclusive source of revenue for the nonprofit organization or the project. In drafting the budget and the narrative, outline different revenue streams that you intend to use as another source to fund the project or program. If the budget the grant provides pays for the entire project, indicate adjacent projects through other funding sources in the narrative. In doing so, it infuses confidence in your sustainability to accomplish the project.

  • 4. Align the Grant Budget and the Budget Narrative

    Most grants require individuals, groups, or organizations to complete budgets using a spreadsheet along with a narrative to explain the items in the budget. Make sure that these two match up. The budget categories must reflect in the budget spreadsheet and budget narrative. Make sure that all budget items have detailed descriptions and justifications in the narrative for the expenses. Most funding bodies are critical in checking if these two documents line up, and the failure to do so results in the nonapproval of a grant. Aligning the budget and the narrative show that you have a conceptual understanding and clarity of the project itself.

  • 5. Have Another Person Review the Grant Budget

    After countless revisions and data inputs in the budget, there is no room for you to review the final product and critique your work. As such, it is advisable to give the grant budget and narrative to another individual to review for further errors and inconsistencies before submitting the proposal to the funding agency.


What is included in a grant budget?

A grant budget must consist of both expenses and revenue. Make sure that the budget has two divisions that show both of these factors.

What is the purpose of the budget in a grant proposal?

The purpose of the budget for grant proposals is to show and serve a plan for funders to see what the program brings to a community and the advantage of funding the project.

How do you write a budget estimation for a grant?

When constructing a budget estimation for a budget, follow the same format as the itemized budget or sponsor budget form for the readers to easily compare both documents. Make sure to check that the budget estimation is in line with the requirements of the granting entity.

Grant budgets are very significant pieces of a grant proposal. Budgets allow a grantor to estimate if a project will yield their expectations after a person, group, or organization proposes a project. It is necessary to make the grant budgets as accurate as possible to make sure there are no losses during the implementation of the project, and that the grantee will not shoulder any expenses that are not covered by the proposed budget. Make sure to write a comprehensive and accurate budget for the grant proposal by downloading 11+ SAMPLE Grant Budget Proposal in PDF only from Sample.net.