Creating a budget for the project is an essential step in developing a successful proposal. The very first step to this process, is to know the funder’s guidelines, for the use of funds. The guidelines will tell you what the funder will or won’t allow and what they want to included in the budget.

Federal and, some state agencies, have forms that are used when developing the budget.  Along with the form, they usually want a budget narrative or justification. This is where you “justify”, in detail,  the expenditures for the project.  This section usually has a page limit that is separate from the narrative. Which will be noted in the funder’s guidelines.

For online applications there may be less space to explain the costs, but it is still important to do so.  Use direct, concise statements to describe how the funds will be spent.  The best time to develop the project budget is at the beginning of the planning process when you are developing the need statement, goals, and plan of operation. This is not always feasible, but if possible. worthwhile.

Organize the budget in the order that the funder’s  budget guidelines are stated. For example, personnel, fringe, travel, supplies, etc.   In writing the budget, consider the total cost of the project, and build a budget that includes the things that the funder’s money will cover and the costs that the applicant will cover.   In the links below provide examples of this type of budget and narrative.


Budget Narrative


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