You've done your research, know how to write a winning grant proposal, and you're confident you can get the funding you need. But before you start writing, it's essential to make sure that you have a realistic budget in mind. Staying within your proposed budget will give you a better chance of getting funding and make it easier to manage your finances once the project is underway.
The grant proposal budget shows how much money you need to complete your project and how you will spend it. This blog post will walk you through creating a winning grant proposal budget.
Grant Proposal Budget: Why is it important to include one?
A grant proposal budget is a plan for how you will spend the grant money, if awarded. It is essential to include a grant budget because it provides a clear overview of the costs associated with the project and demonstrates how you will use the grant money.
The grant budget should itemize all expected costs, including personnel, equipment, and other costs, such as travel expenses. Including a grant proposal budget gives reviewers a financial picture and confidence that the grant money will be used effectively and that the project is feasible.
How do you calculate your anticipated expenses for a grant proposal budget?
You must calculate your anticipated expenses when putting together a grant budget. There are a few key things to keep in mind.
First, list all the potential expenses you might incur to carry out your project. This can include direct costs like materials, equipment, labor, fringe benefits, travel, and overhead or indirect costs.
Once you have a comprehensive list, start estimating how much each item will cost. Remember to be as realistic as possible in your estimates by using previous costs or vendor quotes, as grantmakers often question unrealistic numbers.
Once you've estimated the cost of all your items, add them to get your total budget for the grant application. This number will be used as part of your grant application, so double-check it for accuracy.
When are Modular and Detailed forms of budget used?
There are two common types of budgets used in grant proposals: modular and detailed budgets. Your budget will depend on the guidelines set forth by the funding agency. Modular budgets are typically used for smaller grants, while detailed budgets are required for larger grants.
1. Modular Budget
Modular budgets are more straightforward and less detailed than their counterparts. They often provide only a summary of each expense category without itemizing it. This can make them easier to create with less room for error.
2. Detailed Budget
Detailed budgets, on the other hand, provide a line-by-line itemization of all expenses. This makes them more time-consuming to create, but it also provides a higher level of detail and accuracy.
The funding agency will ultimately determine the type of budget you use. Be sure to carefully read the application guidelines before beginning work on your grant budget.
Things to keep in mind when creating grant budgets
There are a few things to keep in mind when creating your budget. First, be realistic about the costs of the project. Don't try to lowball the costs to increase your chances of getting funded - if the project ends up being more expensive than you anticipated, you may have to come up with additional funding or make sacrifices that could jeopardize the quality of the finished product.
Also, don't forget to factor in overhead costs such as administrative expenses, insurance, and permits.
But before you create a grant proposal budget…
1. Setup Financial Internal Control Systems
When seeking grant funding opportunities, one of the critical components of a successful proposal is demonstrating financial viability and preparedness.
Setting up financial internal control systems is one way to ensure that finances are managed responsibly and efficiently. They can include procedures for tracking income and expenses, maintaining accurate records, and reconciling accounts. You can use QuickBooks Online to automate your ledger and time-tracking software for timesheets and annual salary reports.
By putting these systems in place before creating a budget for your grant proposal, you can show potential funders that you are serious about managing their money responsibly and can generate an accurate grant report.
In addition, well-organized financial records will make it easier for you to track your progress and expenses once the grant funding is approved.
2. Understand the Funder's Grant Guidelines
Grants often outline the funder's requirements which your organization must follow.
a. Grant Amount
When applying for a grant, it's essential to know the maximum amount of money the funder can or is willing to give. This information is typically available on the funder's website.
For example, the National Science Foundation (NSF) has a searchable database of all of the grants that they have awarded. The NSF also has a Grant Proposal Guide outlining the criteria for each grant type.
You can contact the funder directly if unsure where to find the funding amount. They should be able to tell you the maximum grant amount for the type of grant you're interested in. Knowing the maximum grant amount will help you to write a more targeted and competitive proposal.
b. Budget Format
Once you have identified the maximum grant amount you can get, it's time to work on your budget. Many funders provide a budget template or format that applicants can fill out.
However, in some cases, you would need to develop your own budget template or use a ready-made one as a guide on what to include. It should contain the budget category, expenses, and total costs. You may download our free budget template below to get a copy.
“Setting up financial internal control systems is one way to ensure that finances are managed responsibly and efficiently. This can show potential funders that you are serious about managing their money responsibly and can generate an accurate grant report.”
Steps to Create a Grant Budget
A grant budget is different from your organization's operational budget. A grant budget lists the costs related to the project you're trying to fund during the period the grant covers. In contrast, an organization’s operating budget describes your anticipated revenue and expenses for the upcoming year.
1. Break down the total cost into specific budget line items.
Itemize all of your expected costs, including both direct and indirect costs. Expenses related to the project, such as materials or labor costs, are considered direct costs.
Indirect costs are overhead expenses that are not directly related to the project, such as rent, utilities, and medical insurance. Check out these budget samples to understand more about typical budget categories.
2. Include a timeline and project future costs.
Include a budgeted cost timeline if the project spans multiple months or years. Including a timetable can demonstrate to the grantor how the project will be funded over its lifetime.
Additionally, including a timeline in your grant proposal budget can help to project future costs. This is especially helpful for a year-long program or if the project is expected to grow or change over time.
Having a timeline can show the grantor that you have considered the long-term financial impact of the project.
3. Work with the team for cost estimation.
As you develop your grant budget, you must work with your team to get an accurate budget cost estimate. There are a few ways to approach cost estimation.
First, you can use historical data from similar projects to understand the costs involved. Second, you can consult with grant writing consultants and experts in the field to get their opinion on the likely costs. Finally, you can use costing tools and software to generate more detailed estimates.
Whichever approach you choose, it's essential to involve your team in the process, so everyone is on the same page. By working together, you can develop a budget that accurately reflects the costs of your project.
4. Calculate the amount of money you need to request from the funder.
Once you thoroughly understand all the costs associated with your project, it's time to start thinking about how much money you'll need to request from the funding sources.
To do this, add up all your estimated costs and then add a reasonable cushion for unexpected expenses. This will give you a good starting point for how much money you need to request.
However, it's also essential to remember that funders often restrict how much money can be spent on each budget line item.
As a result, you may need to adjust your request accordingly. But by taking the time to calculate your costs upfront, you'll be in a much better position to get the funding you need.
“Having a timeline can show the grantor that you have considered the long-term financial impact of the project.”
5. List other sources of revenue.
There are a few different ways to approach writing a grant budget. One is to include only the bare minimum of budgeted expenses, which may make the funder feel like you're not being transparent about the true costs of your project. Another approach is to include a long list of every possible expense, which can be overwhelming and potentially off-putting to funders.
The best approach is somewhere in the middle: be honest about your project costs, but also show that you have thought carefully about where you can find other matching funds and sources of revenue. This indicates that you are committed to your project and willing to explore all avenues to make it happen.
One way to find other sources of program income is to reach out to corporate sponsors. Many businesses are interested in supporting worthy causes and may be willing to contribute financially to your project.
Also, don't forget about individual donors! Crowdfunding platforms like Kickstarter or GoFundMe can be great places to solicit donations from people who believe in what you're doing.
Including a mix of different sources of revenue in your grant budget will inspire confidence in potential funders and increase your chances of getting grant funds for your project.
6. Make sure your budget proposal is error-free!
Inaccurate figures can lead to problems down the line, so it is essential to double-check your work. An excellent way to avoid mistakes is to use a budget template that you can use for future proposals. This will help you keep track of all the different elements and save you time in the long run.
7. Alignment of budget to overall grant narrative.
A grant proposal is only as strong as its budget. The numbers must align with the goals and objectives in the grant narrative and be realistic. If reviewers can't see how your proposed budget will help you achieve your stated objectives, they aren’t likely to award your organization the grant.
That's why it's so important to take the time to create a well-crafted budget narrative that tells a story and demonstrates a clear understanding of the costs associated with your project.
When done right, a budget can be a powerful tool in winning grant funding. But when done wrong, a failed budget narrative can sink your entire proposal.
Need Help Creating Grant Proposal Budgets? Join Grantable!
Creating a detailed and accurate budget is one of the most critical aspects of writing a grant proposal. Without a well-thought-out budget, your application is likely to be rejected outright.
Fortunately, Grantable can help. We have a community of expert grant-writing consultants happy to share their insights, and our tailored, intelligent writing tool makes it easy to write grants. Plus, our team can provide feedback and answer any questions you may have along the way.
If you need help creating a grant proposal budget, download our budget template to get started and join Grantable today!