Instructions for Writing Budgets for Grants

Potential funders pay close attention to the budgets that accompany grant proposals. While the budget details how an organization plans to spend grant money and lists projected income, it also provides a glimpse into how the organization organizes, develops and supports its programs. Budgets may be simple, one-page descriptions of how an organization will spend a small grant, or a complex, multi-page document that includes attachments, a budget narrative and expansive details, such as income, revenue and administrative costs.

• 1

  Set up a budget worksheet in a table format and include the dates for the project period. A project is usually a one-year period.

• 2

  Review the grant proposal and list all possible expenses in the budget worksheet. The Minnesota Council on Foundations recommends using three broad categories to initially organize expenses: personnel expenses, direct project expenses and administrative or overhead expenses. Include only new costs related to the project. Include expenses incurred by the organization that will be charged to the project, such as rent and utilities.

• 3

  Add to your budget worksheet the income and revenue expected for the project. Include other project grants for which you have or will apply, donations expected, in-kind support from the organization, and income generated by the project, such as sales or fees.

• 4

  Locate the required budget form or format. If no forms or formatting instructions are provided, find a sample budget. Even with no guidance from the funder, proper formatting of your budget is important to the proposal review process.

• 5

  Review the list of items the funder requires in a budget. The funder may require a simple list of proposed expenditures or a list that includes personnel-related expenses, facility costs, supplies and materials, taxes and insurance.

• 6

  Insert the information from your budget worksheet into the budget form. The items on the budget form are usually more detailed than the broad categories used in your budget worksheet.

• 7

  Use the approved formula for administrative costs provided by the foundation or your organization. Foundations usually inform grant applicants whether administrative costs are allowed and what percentage of the total budget is allowed. Metropolitan State College notes that administration costs, also called general costs, are difficult to separate out from the organizations expenses and most organizations have a formula for determining such costs for a project.

• 8

  Complete a budget narrative, if required. The budget narrative provides a few brief statements about each item in the budget and explains how the dollar amounts were calculated. For instance, the calculation of personnel expenses such as payroll taxes and health insurance are explained. The calculation of travel expenses is included with the reasons for project-related travel.

• 9

  Check all calculations and budget totals and compare the budget to the proposal and to the budget narrative to make sure that all three documents provide the same information about expenses and income.

• 10

  Ask another staff person to review the budget before submission to check for accuracy and to ensure that the budget adheres to the organization's policies and procedures.