The budget for the project should be directly related to the scope of work that is to be carried out. Every item in the budget should be completely justified as to why it is needed and how it is related to the proposed activities.
Items listed in the budget form should have a reference to specific justification items and should include the specifics on how that figure was developed. Do not forget to include such items as fringe benefits and indirect costs. It may be helpful to discuss your draft budget with the Office of Grants and Contracts Administration before putting it in final form.
Preparation of the budget is the most difficult section of the proposal. Granting agencies review hundreds of proposals and are proficient at comparing levels of funding requested to the project proposed. Overestimating or underestimating budgetary needs may lead to proposal rejection.
- Funding agencies review the grant budget to make sure that the project is feasible given the budget request. Funding agencies favor projects that demonstrate that the Principal Investigator has paid careful attention to the time and effort required on the project and is fully aware of how much this time and effort actually costs.
- Funding agencies recognize that externally-funded projects have other costs that are not easily identifiable within a project. These costs are known as "Facilities and Administrative" (F & A) costs for the institution. Costs that are incurred by a grantee for common objectives and cannot be identified specifically with a particular project or program. These costs are also known as "indirect costs." For example, if a project coordinator is hired for a grant, Human Resources must spend time and effort processing new hire paperwork. If work is to take place in a campus space, costs associated with lighting, maintenance, etc. Rather than account for each of these items individually within a grant budget, most funding agencies allow us to request F & A costs based on a negotiated rate. Requesting F & A costs does not impact whether the proposal receives funding or the amount of Direct Costs available for the project.
- Funding agencies sometimes require a "Cost Share," meaning that the college covers some of the costs for the project. If funding agencies will not accept requests for F & A rates, they may consider those costs as part of the GSC “Cost Share.” It is sometimes helpful to outline GSC contributions, whether or not a Cost Share is required. If a funding agency does not require a cost share, then none should be listed in the budget.