How to Prepare a Grant Proposal Budget for a Nonprofit

The Basics

Preparinng a budget.
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For many grant writers, who sail through most of their proposals effortlessly because they are good writers, the budget can be a nail-biter. However, knowing some basic principles of writing grants, such as how to present the costs of your project, can make writing a grant less stressful.

If numbers are not your forte, be sure to get help from your business office or accountant. Never go it alone when it comes to grants. Assemble a team of people from those who are responsible for programs, your business people, and human resource staff. You’re going to need all of them.

Budget Preparation for Grants

Present your grant proposal budget in a way that will make an excellent impression on the grant reviewer. Consider the story you’re telling in the other parts of your proposal and make your budget match that story.

Review the guidelines from the funder and use the budget categories provided. Remember that budget costs must be both “reasonable” and “allowable and allocable.” Follow these basic tips.

  • Print your budget on a new page
  • Align figures correctly
  • Double-check your data and round off your numbers which will make them easier to read
  • Include column headings, such as Budget Category, Requested Funds, Local Contributions, and Project Total

Organize your budget, so it is easy to read and understand. Have another person look at your budget. Can he or she understand it? If not, go back to the drawing board. Have your business person recheck all of your numbers and that all information is accurate.

Direct Costs for Grants

Direct costs for your grant are perhaps the most critical part of your grant’s budget. They are the funds you are asking from the funding source. Direct costs usually include:


If your program requires that you cover staff costs, include that salary under the category “personnel."

If you are hiring new employees, determining the actual salary can be tricky. One place to start is by checking with similar organizations to find out what they are paying program employees in similar positions. Online sources may be helpful, as well. Check out Payscale and Glass Door to research salaries.

Indicate whether or not a salary is an annual one or an hourly wage. If hourly, show the breakdown of hours and weeks, such as $10.00 per hour X 40 hours per week X 52 weeks = $20,800). You can use this online calculator to convert an hourly wage to an annual one.

Fringe Benefits

Fringe benefits are those taxes and benefits that the employer must pay for an employee. Based upon gross salary, they typically average around 25 percent, depending on the size of your nonprofit and its benefits package.

Fringe benefits that are required by law include FICA (Social Security and Medicare), FUTA (Federal Unemployment Taxes/Insurance), SUTA or SUI (State Unemployment Taxes/Insurance), and Worker’s Compensation (on-the-job accident insurance).

Other benefits include medical insurance and paid sick leave. When listing fringe benefits in your budget, be sure to note “Standard Government Fringe Benefits Package as Required by Law,” in case a reviewer does not know what fringe benefits include.


Many times travel can be included in the proposal’s budget. While travel expenses are a heavily scrutinized item, there are ways to get them approved.

Make sure to provide precise formulas and documentation for why travel is necessary. Include the cost of a plane ticket, the price of a hotel per night and the number of nights you will be staying, and a food allowance. Use realistic but conservative figures, 


Funders often scrutinize the purchase of equipment. To help them understand equipment costs, give them documentation of the program need for the equipment.

Equipment costs should be well defined and include specifications. For example, you might add a high–speed copier system to reproduce reports and other documents for committees, staff members, and volunteers. You should explain how the copier will help administer the program.


Funders qualify or define supplies in different ways. Always check with the funding source before including this section. Explain how the supplies assist in running the program. Also, break down supplies into categories such as general office supplies, educational and training supplies, and computer supplies.

In-Kind Contributions 

In-kind contributions are goods or services donated to the organization. These services/contributions can often be used as matching funds by many funding sources. Examples of gifts-in-kind include:

  • corporate volunteers and pro-bono professional services
  • use of a building and utilities
  • advertising
  • donation of computers, or other tech resources
  • transportation

Base the value of these services or goods on their “market value.” For example, a volunteer working in an unskilled position would be calculated at minimum wage rates. Also helpful is the Independent Sector's annual estimate of the worth of a volunteer's time in each state.

To indicate this in a budget, you might include a formula such as five volunteers X $xxx hourly X 5 hours per week X 36 weeks = $xxxx. In-kind contributions can impress reviewers as they provide evidence that your program enjoys community support.

Indirect Costs for Grants

Indirect costs for your grant (“overhead”) are costs for administration and facilities, such as:

  • Building costs 
  • Insurance
  • Utilities
  • Trash pickup, professional cleaning services, etc.

Sometimes a percentage of total indirect costs can be reimbursed by a funding source, but only if an indirect cost rate has been negotiated and approved by the grantor.

Before including any indirect costs category in your budget, make sure you thoroughly read the RFP (request for proposal) and the grant guidelines. Those resources will tell you whether or not indirect costs apply to this grant program.

Recommended Resources:

Foundation Center (Many resources, including grant writing workshops).

Updated by Joanne Fritz