I often hear over and over again how difficult it is to create a budget. In many ways I can understand that this is a problem, as most grants are about specific ideas and will need a budget figure. It is difficult to budget ideas; thus, many people struggle with this particular part of the proposal. Nevertheless, the budget is a key element of most grants. An effective proposal budget outlines the project in fiscal terms and helps reviewers determine how the project will be conducted. Budget information about the activities planned and personnel who will serve on the project also provides reviewers with an in-depth picture of how the project will be structured and managed. Your financial plan details usually reveal to the donor whether your project has been carefully designed and if it is feasible.
The budget must give an accurate assessment of all cost items and cost amounts that are deemed necessary and reasonable. It should be complete and include all costs for any personnel, supplies, and activities that will be undertaken. If the project is funded, the budget will become the financial plan used by the funding agency to provide support. Once negotiated and approved, the budget will be etched in stone, and modifications will require the approval of the donor. It will also be a legal agreement between the institution and the donor and will be subject to audits to ensure compliance.
Where should one begin?
The solicitation – The first step in the process of submitting a proposal is to identify the appropriate solicitation. For federal grants, this could be a Research Funding Announcement (RFA), Request for Proposal (RFP), Proposal Announcement (PA), or Funding Opportunity Announcement (FOA). If you are applying to a foundation, they may have different solicitation announcements that you would need to follow. It is vital to read the announcement in its entirety before starting. The solicitation will give funding guidelines and will state any budgetary restrictions. A budget template is often provided as well. It is critical to determine whether there are any limitations on direct or indirect costs.
Grants Office – The second step will be to outline your budget categories and discuss those with the staff in your research office or a grants office. They can assist you with personnel details, equipment, and other budget categories. If, on the other hand, you have to come up with a budget on your own, you will need to consider the following direct and indirect costs.
Putting the Budget Together
Direct costs are the expenses that the donor will pay for a specific project. These costs will include activities and expenditures that will take place during the course of the grant, such as personnel salaries, employee benefits, travel, equipment, publications and training. It is important to adhere to the allowable costs for personnel salaries and fringe requests.
- Personnel Costs – This category will always be the first part of the budget and will include the percentage of time dedicated by each of the key and non-key personnel. The Principal Investigator (PI) or the Project Director (PD) may devote a certain percentage of time to the project. The cost will be determined from his or her current salary and benefits. The non-key personnel, such as students or others not directly involved in the content of the project, also are included in the budget in terms of the percentage of time spent on the grant.
- Other Costs – Equipment (with acquisition cost of more than $5,000 as per most government grant guidelines), travel, participant support, consultants, statisticians, training costs and animal purchases will be categories for those doing research projects. Materials, supplies, publications, and computer services might be additional costs.
- Activity Costs – For project grants, the main areas that drive the budget will be the solicitation requirements and the objectives and activities of the grant. Thus, every activity should be budgeted according to personnel and non-personnel costs. For example, how much time will be dedicated to evaluation both in terms of personnel and non-personnel costs?
Indirect Costs – These are the costs that an institution will charge the grantor for conducting the project.
Often referred to as the “costs of doing business”, overhead, and facilities and administration charges, these costs are negotiated with federal and state governments. It is essential to adhere to the solicitation’s allowable costs for this category. Donors may restrict the percentage of allowable indirect costs. Some may allow the total amount requested, others a certain percentage, and yet others none at all. The latter is especially the case with foundations.
It is important to remember that a budget will not include any costs incurred prior to receiving the grant and any that will follow the life of the grant. Additionally, there are frequently total allowable funding limits and cost share requirements, all of which must be first taken into consideration.
Ultimately, the budget will tell the fiscal story of your proposal and must match the narrative of the project. It must be detailed, accurate, necessary and reasonable. Your story should begin with the narrative and end with the budget, and both need to match up perfectly.
Latest posts by Mathilda Harris (see all)
- How Does Grant Writing Experience Help Me Get a Job? - August 21, 2023
- What You Need to Know About the NIH Data Management Plan - July 31, 2023
- What Makes a Successful Grant Writer? - May 30, 2023