What are the best budgeting practices for grant proposals?

1 Know your goals and objectives

Before you start crunching the numbers, you need to have a clear idea of what you want to achieve with your grant proposal. What are the specific outcomes and impacts you expect from your project or program? How will you measure and evaluate them? How will they align with the mission and vision of your organization and the funder? Having a well-defined and SMART (specific, measurable, achievable, relevant, and time-bound) set of goals and objectives will help you estimate the costs and benefits of your proposal and justify them to the funder.

2 Research the funder and the market

Another crucial step in budgeting for grant proposals is to research the funder and the market. You need to understand the funder's priorities, preferences, and requirements for budgeting and reporting. Some funders may have specific guidelines, formats, or categories for budgeting, while others may allow more flexibility. You also need to research the market conditions, such as the average costs of materials, services, salaries, travel, and other expenses related to your project or program. You can use online databases, surveys, reports, or other sources of information to benchmark your budget against similar projects or programs in your field or region.

3 Break down your budget into categories and items

Once you have a clear picture of your goals, objectives, and market conditions, you can start breaking down your budget into categories and items. A common way to organize your budget is to use the following categories: personnel, fringe benefits, travel, equipment, supplies, contractual, other, and indirect costs. Within each category, you should list the specific items that you need to implement your project or program, such as salaries, benefits, airfare, hotel, computers, software, consultants, fees, etc. You should also provide a brief description and justification for each item, explaining how it relates to your goals and objectives and why it is necessary and reasonable.

4 Calculate your total budget and request amount

After you have listed and described all the budget items, you need to calculate the total budget and the request amount for your grant proposal. The total budget is the sum of all the costs that you expect to incur for your project or program, including both direct and indirect costs. The request amount is the amount of money that you are asking from the funder to cover part or all of your total budget. You should also indicate if you have any other sources of income or matching funds that can contribute to your total budget. You should use clear and consistent formulas, units, and rates to calculate your budget and request amount, and make sure they are accurate and realistic.

5 Review and revise your budget

The final step in budgeting for grant proposals is to review and revise your budget before submitting it to the funder. You should check your budget for errors, inconsistencies, gaps, or redundancies, and make sure it is aligned with your goals, objectives, and narrative. You should also ask for feedback from your colleagues, partners, or experts who can offer a different perspective or insight on your budget. You may need to adjust your budget based on the feedback, the availability of funds, or the changing circumstances. You should also be prepared to negotiate your budget with the funder if they have any questions or concerns about your budget.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?