Most funders require a project budget with your grant proposal to ensure that a sufficient/judicious plan for spending the funds is followed. The budget could be very detailed or very broad, depending upon the funders specifications. Again, reading the RFP thoroughly and understanding what the funder is requesting is imperative.
The purpose of the budget narrative is to supplement the information provided in the budget spreadsheet by justifying how the budget cost elements are necessary to implement project objectives and accomplish the results. The budget narrative is a tool to help the funder/reviewer(s) fully understand the budgetary needs of the applicant and is an opportunity to provide descriptive information about the costs beyond the constraints of the budget spreadsheet. Together, the budget narrative and budget spreadsheets should provide a complete financial and qualitative description that supports the proposed project plan. The description provided on the budget spreadsheet should be very brief. Use the budget narrative to provide a thorough description of your budget.
Here are some typical categories of your project and how you should cover them in the narrative/justification.
Personnel and Fringe Benefits (Direct FTE Costs)
Personnel: Provide the name and project role of every person listed on the budget. Describe the role each person will have on the project and provide a brief summary of duties and responsibilities. Also please identify key personnel on the project.
Fringe: Describe the components in the fringe benefits package provided to personnel. Examples of components are health and dental insurance, life insurance or pension contributions.
Travel (Direct Travel Costs)
Give the number and type of trips and total cost of the travel request; describe how the proposed travel benefits the project and why the travel is necessary to accomplish the objectives and results of the project. If there are unusual or special circumstances that require a high volume of travel, please provide a thorough explanation that justifies the expense.
Consultants (Direct Consulting)
Describe the work to be performed by each consultant and how the work is necessary to accomplish the objectives and results of the project. Provide information about the unique expertise or skills of each consultant and why the consultant was chosen to work on this project. Describe the cost components expenses (including travel, supplies and other costs, for example).
Direct Supplies and Other (Direct Supplies and Other)
Provide a brief description of the requested supplies, services or other costs (e.g. maintenance contracts, publication costs) and explain how the items will be used to accomplish the work on the project.
Equipment (Direct Equipment)
Provide a brief description for each item of equipment requested. Explain how each item will be used and explain why the purchase of the equipment is necessary to accomplish the objectives and results of the project.
Sub-grants and subcontracts (Sub-awards Total)
Describe the attributes and expertise of each organization chosen to participate on this project as a sub-grantee or subcontractor and to which specific objective(s) or result(s) their participation will contribute.
So to recap:
The budget narrative is an essential part of your grant application and should:
• Be reasonable
• Thoroughly and clearly describe each item
• Follow all guidelines and limitations as provided in the application package
• Be easy to follow and understand
• Be mathematically correct
• Correspond with the information and figures on the budget forms
Remember: The person(s) reviewing your budget may not be familiar with your project. It is very important to be clear and thorough in your budget justification.