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I receive a monthly electronic newsletter from Hanover Grants in Washington, D.C. A recent issue focused on “Four Steps to Take Before Developing a Grant Application Budget. “ This reminded me how important budget development is for a successful grant proposal.

The four steps to take are:

  1. Determine the budget requirements of the program for which you are applying
  2. Determine which budget forms are required
  3. Determine the requirements for the budget narrative
  4. Determine which regulations are relevant for your proposal

Budget development is perhaps one of the parts of a proposal that tends to be overlooked. However, more and more grant makers are assigning increased significance to the budget, budget detail and budget narrative.

Here’s a brief two and a half minute video overview entitled: “Writing Tips and Teaching Strategies: How to Write a Budget for a Grant”:

Watch this video at YouTube.

Most budgets are composed of two kinds of costs: direct costs and indirect costs.

Direct costs are those expenditures that are made by the project and directly allocable to the project. These include expenditures for project personnel salaries and employee benefits, supplies, travel, equipment, telephones, and postage. All direct cost items must be included in the budget.

Indirect costs are expenditures that cannot be allocated to a specific project. These include the costs of purchasing, personnel, accounting, security and custodial services, building depreciation, and utilities.

There are basically two kinds of matching: cash and in-kind. All items that require the exchange of money are regarded as cash matching. These include the costs of any faculty salaries, supplies, or travel which are to be charged to a University operating account. Any items that do not involve the transfer of money are classified as in-kind matching.

Ohlone College has established several questions that should be addressed in developing a proposal budget related to Fiscal Impact on your institution.

  • Does it have cost repercussions to the District?
  • Does it require hiring a new staff person(s)?
  • Can a current employee be reassigned to grant responsibilities?
  • What equipment is needed?
  • Where will the grant be operated?
  • Does this project fit within the district’s strategic plan?

Additional Tips and Suggestions for Budget Builders:

  1. Create a working Excel spreadsheet
  2. Work with your business office to check your budget figures
  3. Calculate your salaries based upon step, merit and COLAs for multiple year budgets
  4. Describe your calculation for each budget category in your budget narrative
  5. Do not over-match, since you will be required to document all match

Remember, the budget builds the proposal and the proposal builds the budget!<>