Grant Writing Tips for Nonprofits: Grant Budget Game Plan

When you’re writing grant proposals, one of the documents you’ll often be asked to provide is a project budget. Putting that budget together can feel like walking a tightrope. On one side, you want to make sure you’re asking for enough to fully support your program. On the other, you must be careful not to overreach or include requests that might turn funders off. 

That’s why we asked Jess Stack, founder of HayStack Essentials, to provide a game plan for setting a grant budget. Jess is an experienced grant writer, project manager, and grant funding strategist who helps nonprofits secure the funding they need to be successful. 

Let’s break grant budgeting down so you can confidently build a grant budget that reflects your nonprofit's needs while aligning with funder expectations.

Grant Writing Basics: What You Can Ask For

When it comes to grant budgets, there are many things you can ask for—often more than you think! Here are some essentials:

• Personnel Costs: Salaries, wages, and benefits for staff directly involved in the project can all be included in your grant budget. This includes everything from the executive director’s time (if they’re overseeing the project) to hourly wages for support staff. Remember, funders know that people are at the heart of your mission, so don’t be shy about including these costs.
• Program Costs: These are the expenses directly tied to your program's activities—like materials, supplies, and equipment. Need laptops for data collection? Supplies for a community garden? These all count as legitimate program costs.
• Administrative or Indirect Costs: These are often referred to as the “overhead” costs and can include office rent, utilities, and administrative support. You can even include software in this category, such as a new CRM or accounting platform for your nonprofit. Many funders understand that these are real and necessary expenses, but be aware that some may limit the percentage you can allocate here—typically between 10% to 20% of the total budget.
• Travel and Training: If your project requires travel—whether it’s to meet with stakeholders or attend a critical training session—be sure to include these costs. Funders appreciate seeing that you're investing in your team’s professional development and networking opportunities.

The No-Go Zones: What You Cannot Ask For

There are also some areas where nonprofits need to tread carefully:

• Unrelated Expenses: This might seem obvious, but it’s important to stress that any costs not directly related to the project or program won’t fly. This includes things like entertainment expenses (no, you can’t expense a trip to Disneyland under “community engagement”) or fundraising costs unless the funder has explicitly stated they will cover them.
• Marketing, Advertising, and Grant Writing: While essential for your organization's growth, most funders view these as operating expenses rather than direct program costs. They typically expect nonprofits to have other revenue sources to cover marketing and advertising expenses. The same goes for grant writing fees—these are often considered part of your overall development costs and are rarely funded through program-specific grants.
• Capital Campaigns: Some funders are okay with supporting new buildings or major renovations, but many are not. Always check the guidelines to see if capital expenses are allowed before including them in your budget.
• Endowments and Reserve Funds: Most grants are meant to be spent on specific projects or programs, not saved for a rainy day. If you're hoping to build up a reserve fund or contribute to an endowment, you'll likely need to seek out funders who specialize in that type of giving.

Tips for Balancing Your Budget

Now that you know what you can and can’t ask for, here are a few tips for putting together a balanced grant budget:

• Align Your Budget with Your Narrative: Make sure your budget tells the same story as your grant proposal. If you’re saying that your project is all about direct service to the community, but your budget allocates 50% to administrative costs, funders might raise an eyebrow. Consistency is key.
• Be Transparent and Realistic: Be honest about your needs. If you lowball your budget, thinking it will make you more appealing, you risk underfunding your project and burning out your team. On the other hand, inflating your budget could lead to questions about your nonprofit’s credibility. Find that sweet spot by carefully assessing what you truly need to succeed.
• Include a Budget Narrative: A budget narrative is your chance to explain each line item in detail. It helps the funder understand why each cost is necessary and how it supports your project’s goals. Don’t skip this step—it can be a game-changer!

Build Relationships with Funders

Finally, remember that managing grant budgets isn’t just about numbers; it’s about relationships. Funders want to see that you’re using their resources wisely and effectively. Don’t be afraid to ask questions if you're unsure whether a certain expense is allowable. Building a strong, open relationship with your funders can provide clarity and prevent misunderstandings down the road.

Conclusion

Creating a grant budget can seem daunting, but by knowing what you can and cannot ask for, aligning your budget with your project goals, and building strong relationships with funders, you can confidently put together a budget that meets your nonprofit's needs and inspires funder support.

Remember, your budget is more than just numbers—it's a reflection of your mission, your values, and your vision for making a difference. So, take the time to get it right!

If you’re interested in working with HayStack Essentials to help your organization secure grant funding, contact us at www.haystackessentials.org.

Ready to level up your grant management? From proposals to awards to budgets to reports — MonkeyPod’s grant management software for nonprofits will help you manage it all. Request a demo with our team to learn more.