The Money Zone
Budget Basics 2: The Budgeting
Beth Sutter | June 6, 2023
Created by our grant writing team, this series of articles provides guidance on the financial development and management processes of competitive funding.
Budget planning is one facet of the federal grant process and a key part of competitive funding.
A specific, well-thought-out budget showcases your credibility and demonstrates how your organization will put funds to good use compared to other applicants. You’re already familiar with BUDGET BASICS and started thinking about the budget requirements. Now it’s time to write it out!
Typical categories in a federal grant include:
1. Personnel (Salaries and Wages):
List each position involved in the project. Include annual salary rate and percentage of time dedicated to the project, but only employees in your organization. Any additional grant-funded employees should be listed in the consultants/contractors section.
2. Fringe Benefits:
Include only for listed personnel and their time dedicated to the project. Base fringe benefits on known costs or an established formula.
List out travel expenses for personnel by purpose (e.g., training, site visit, community meetings). Don’t forget to show your math (e.g., three people for two days of training at $X airfare + $X hotel + $X per diem).
Equipment should 1) have a useful life of more than two years, and 2) cost more than $5,000 per unit.
List any materials or supplies by type – anything that will be consumed or expendable equipment less than $5,000.
Include if you are paying another organization or individual to do specific work related to the project activities. Have quotes and/or scope of work available for each.
Construction dollars are limited in grant projects and often ineligible – be sure to review the funding notice carefully before including construction costs!
8. Indirect Costs:
Indirect costs—such as office space rental, utilities, and clerical staff salaries—are allocated using an indirect cost rate (ICR). An organization can either use the 10% de minimis rate or establish a negotiated ICR with a cognizant federal agency, such as the U.S. Department of Energy. The ICR will then apply across all federal grant programs.
9. Other Costs:
The miscellaneous category for any additional costs that don’t fit into the other sections.
- Look for a template.
Many competitive funding opportunities provide their preferred template or guidance for a budget format.
- Align with the funding notice.
Confirm all costs you include in the budget are allowable, allocable, and reasonable.
- Show your work.
Show how you determined the costs and describe why that line item is needed.
Much of the grant application process will relate to your budget, including project scope. If you have a solid project budget before the application opens, the process will be a lot smoother.
Contact CFS for more guidance on how to get grant-ready!