Developing A Proposal Budget Suggestions

In preparing your proposal budget, your top priority is to clearly communicate how much money you need to successfully complete the project, where you think that money is going to come from and how you are going to spend it.

Funding organizations also want to know that the proposing organization is fiscally viable and can financially sustain itself through this project and beyond.

In addition, they want to know the organization can and will be accountable for the funds it is requesting—to the funding organization and to other publics (boards, citizen groups, etc.)

Below are some hints on preparing a successful proposal budget:

• A budget should clearly depict how much money is needed and how it will be used.

• The budget should be comprised of sources (income) and uses (expenses) of funds.

• Sources of funds (also called revenues) should include names of other funding organizations and amounts pledged or received as well as amounts still needed to be raised and possible sources for those funds. Revenues can include cash and in-kind contributions such as donated goods, services, facilities or staff time.

• The budget should indicate the time period covered by the program activities.

• The budget should indicate if requested expenses are one-time or on-going.

• There should be a clear link between planned activities and proposed expenditures.

• Make sure that you have accounted for all costs, such as benefits and payroll taxes as well as salaries.

• If you request an allowance for overhead costs, be aware that some funders do not reimburse these costs and some have internally mandated limits on what percent they will fund.

• Finally, although it may sound obvious, make sure that all the numbers add up and exactly match the numbers described in the proposal narrative.

The following is a list of budget categories you may want to include when developing your proposal budget:

Sources of Funds (Revenues)

• Federal/state/local grants or contracts

• Corporate and foundation grants

• United Way and Federated Campaigns

• Other fundraising, such as individual gifts and special events

• Other types of income (fees, membership dues, sales of publications or projects, etc.)

• In-kind support:

  • Donated goods, services or facilities

  • Donated staff time

Uses of Funds (Expenses)

• Salaries, benefits and payroll taxes
• Stipends for non-salaried workers
• Professional or consulting fees
• Insurance
• Travel and transportation
• Supplies, copying, postage
• Rent and utilities
• Maintenance
• Staff training and development
• Administrative overhead
• Equipment—non-capitalized (minor)
• Equipment—capitalized (major)
• Program expenses (such as classroom materials)
• Other services

Here are a few other things to consider as your prepare your proposal budget:

• Funding organizations will be interested in how the on-going program costs will be covered once the grant period is completed. Be sure to include this explanation in the sustainability section of your proposal narrative.

• It will be helpful to submit a copy of your organization’s most recent annual operating budget and/or audited financial statement to put the size and scope of the project in context. (In general, funding organizations will be interested in how your organization funds its on-going operations and other special programs and initiatives).

• You may be challenged about whether this program is possible at a lower funding level or if the program can be segmented if full funding is not received during the proposed time period. Be prepared with a “fall-back” position, if feasible.

• It can be helpful to contact a funder directly while you’re developing your proposal budget to determine if they have set guidelines for fringe benefits and overhead.

• You will make the funder’s job of reviewing your proposal easier by being completely clear about where funds are coming from and how they will be used:

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