Tips for Drafting a Strong Grant Proposal Budget Justification
Tips for Drafting a Strong Grant Proposal Budget Justification

By Sandy Trowbridge, Grants Development Associate

 

Budget justifications (sometimes referred to as budget narratives) are a key component of standard grant applications. Most grant applications will also include a cover page​, executive summary​, needs statement​, project narrative​, itemized budget​, assorted appendices, and other supporting documents​. These application components will vary slightly across funders.​ For example, for the budget portion of an application, some funders may request a complex budget spreadsheet to be accompanied by a detailed budget justification while others may ask for a simple one-page outline of your planned activities and projected total expenses. Some funders limit the budget justification length to a specified number of pages, whereas many other funders will not place a page limit on this section. Some funders may list specific budget categories to be used, while others will leave line-item organization up to your discretion.​ As such, it is important to pay close attention to the guidelines of the specific funder and solicitation that you are working on and follow those instructions exactly. ​What follows is some general advice to keep in mind when tackling the budget justification portion of your grant application, regardless of which funder you are applying to. ​

One thing to highlight is the fact that budgets and budget justifications are core parts of any grant application. They should not be an afterthought and ideally should be tackled early in the process instead of being left to the end. This approach will not only strengthen your budget and budget justification but also your project narrative. The budgeting process forces you to think through each activity in a level of detail that allows you to price it out. And doing so early on allows you to build some of this detail into the project narrative. It also confirms whether what you are proposing to do is financially feasible within the grant's budget ceiling and period of performance. If not, knowing this sooner rather than later gives you more time to modify the project plan as needed. ​At the heart of it, grant applications are monetary proposals. You are asking for money from a funder to conduct specific mission-driven activities, so prioritizing budget development early on in your grant application drafting process is a good practice to follow.​

What is a Budget Justification?

A budget justification is a companion to the budget. While the budget spreadsheet identifies all line-item costs required to implement the proposed project, the budget justification provides a narrative explanation of each itemized cost. ​The key is that this explanation describes both how the costs included in the budget were calculated and why each cost is required to successfully implement the proposed project. ​

Put simply, the project narrative describes your proposed project in words, the budget describes your proposed project in numbers, and the budget justification describes your proposed budget in words (again, with that added focus on explaining how costs were estimated and confirming why these expenses are needed to carry out the activities detailed within the project narrative). ​Looking at your budget justification in this way highlights the importance of alignment between all of these proposal components. ​Your goal is to leave reviewers with absolutely no question as to what it is you plan to do (the specific project activities as detailed in the project narrative), how you plan to do it (what resources will be required to implement those activities within a certain timeframe as detailed in the budget), and ultimately why you need the funding requested through your grant application to be successful in your proposed efforts (as detailed in the budget justification).​

What Does a Budget Justification Look Like?

​To further highlight the importance of this alignment, let us consider a simplified example. Our budget notes that we are requesting $23,025 for travel, and our project narrative notes that "Project team members will present annual project results at the Education Conference in Washington, D.C...", and "Project team members will conduct annual focus groups with educators and employers throughout the state....".​ Here you can see how the need for a specific cost, like travel, may be implied in the project narrative, and a cost included for this in the budget, but the financial implications may still not be readily apparent to the reviewer. The reviewer might read the project narrative and budget sections and still wonder why we need such a large amount of money for travel. And this is where the budget justification shines. It allows us to expound a bit further so that the reviewer is left with no question as to what our plan is and how specifically we arrived at $23,025, with the goal that they ultimately agree that all proposed costs are reasonable.

​Going back to the definition of a budget justification, we need to make sure that we describe both how the costs included in the budget were estimated and why each cost is required to successfully implement the proposed activity detailed within the project narrative. ​In the example below, the sentences in blue show how we have estimated the costs, and the sentences in green show why each cost is required. You will note that we are specific with our calculations - showing all of the math that was done to arrive at the overall Travel budget category estimate. We also use the same language that was used in our project narrative, making it easy for reviewers to cross-compare the two application sections. Our project narrative noted that "Project team members will present annual project results at the Education Conference in Washington, D.C.... " and our budget justification points to that activity. ​ To take this one step further, if your activities are numbered in your project narrative (for example, if the presentation of annual project results at the Education Conference is noted as Component 6 in the project narrative), you can then refer to "Component 6" when costing this out in the budget justification to further aid in highlighting alignment between these application components. 

Travel: $23,025

 

 

 

 

How to Get Started When Drafting a Budget Justification?

When drafting a budget justification, it is helpful to start by reviewing the grant solicitation and wrapping your head around the requirements of the funder. Do they provide a specific template? Do they note any page number limitations? Do they require the inclusion of specific budget line items? 

Once you have a handle on this, then start drafting the budget justification side by side with your budget by working through the documents line by line and writing out a narrative explanation for each cost. While doing this, have your project narrative up on the screen as well (if that has already been drafted) for additional context and so that you can appropriately cite specific activity numbers or narrative sections. This will make it easier for the reviewer to track all of the connections and also make sure that all activities noted in the project narrative have an accompanying cost included in the budget. As updates continue to be made to the project narrative as the project scope is refined throughout the process, make sure to reflect all of these changes in the budget and budget justification as well. 

The budget justification should address each of the major cost categories in your budget (things like personnel, fringe benefits, travel, equipment, materials, supplies, other direct costs, and indirect costs), as well as any additional categories required by the funder. So, make sure to outline the budget justification in the same order and with the same section headings as your budget. This approach helps both in the writing process and eventual readability and clarity for reviewers. 

Additionally, with each section, spend time anticipating the reviewer's questions and providing detailed answers so that they are not left wondering and are less likely to follow up for additional information or simply not fund your project altogether due to lack of clarity. Sometimes this means drafting, then stepping away for a time, and then coming back with fresh eyes or asking a colleague with no familiarity with the project to review it and give feedback. Any questions they have would likely be echoed by reviewers, so it is better to answer those upfront. 

How to Review a Budget Justification?

Once your budget justification has been fully drafted, go back through and ask yourself a few questions as detailed in the following budget justification review checklist. If the answer to all these questions is "yes", then have confidence that your budget justification is in good shape. If one or more is "no", then know it is worth revisiting and further refining. 

Clear

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Why Does it Matter?

Taking these steps is key as a complete and realistic budget justification demonstrates that your project is well thought out, that you have a clear plan, and that you fully understand the costs that will be required to successfully implement your project’s various activities within a specific timeframe. ​All of this detail builds your credibility in the eyes of the reviewer and gives them greater confidence that your project is worth investing in.​Reviewers will typically know a bit about the logistics of implementing the proposed work and the various costs associated with this work, so writing a strong budget justification will also help to convince them that all proposed expenses are necessary and limit the likelihood of reviewers removing your grant request from consideration due to lack of clarity.​ Ultimately, a budget that is adequately and appropriately justified is the best way to ensure a positive cost analysis by the funder.​ As we explored throughout this article, there are several simple recommendations that you can follow to improve the quality of your budget justifications, and in so doing, improve your likelihood of grant award.