Date last updated: Wednesday, September 1, 10:22 PST
Back to the basics: Developing a federal grant budget
Everything we do costs money. Just sitting at a desk in an office requires a long list of things which relate to the department’s budget. The phone, electricity, heat, air conditioning, paper, pens, laptop, ink for the printer, insurance, stickies, stapler and the list goes on. When developing a grant, you must determine the cost of the project or equipment and present it to the funder. It is all about the details. Read the request for proposal fully and carefully to assure that the grant you are considering will actually pay for the project and its supporting needs.
Once you have developed your grant project, you must apply a cost to everything that project requires full implementation. For example, if you are going to purchase a piece of equipment for the department with the grant funding, you must think through all of the related costs for the acquisition, use and sustainability of that equipment. The cost of the entire project may not be fully paid for by the funding source but it is your responsibility as the grant writer to calculate the actual total cost of the project. This will allow you and your chief to understand the department’s financial commitment to the project.
Below is a list of sample of all the budget categories to consider when purchasing equipment:
• Personnel time: manage/implement/order/process/install/test/report
The more grants your department has received, the higher the cost to the department’s budget for those things which have been designated as an in-kind contribution or as a required financial match given under the in-kind category. Many departments offer personnel time as in-kind. That time not paid for by the grant can be a considerable dollar amount. If personnel time is included as in-kind or a match for the multiple grants the total departmental financial commitment could be substantial!
A well prepared grant budget should be reasonable and demonstrate that the funds will be used wisely. Your application must also determine the need for the equipment. It must be concrete with sound as well as accurate using budgeting principles. It should be clear and understandable. It should be formatted properly using excel spreadsheets or the form provided by the funder.
All salaries must be comparable to those within the department. You cannot hire a new person or shift an existing person into a grant funded position which pays a much higher rate than if you would have hired them under you existing budget. If it is a new hire, you must demonstrate that you have existing space and equipment for that person or include it in the budget either as your contribution to the project or if allowable, must be attributed to the funder’s costs for the project.
All federal grant projects require the designation of an indirect cost rate. Indirect costs are costs that are not readily assignable to a particular project, but are necessary to the operation of the organization and the performance of the project (like the cost of operating and maintaining facilities, depreciation, and administrative salaries).
Sometimes the federal funder makes budget adjustments after the grant award. This is a lengthy process and can be avoided by researching the financial guidelines while developing your grant project. You must assure a complete budget by considering all of the costs upfront. In order to assure your budget meets all of the federal financial requirements, you should download the Bureau of Justice Federal Financial Guide by clicking below
Using the Financial Guide, the OJP budget detail worksheet and the instructions provided to you in the request for proposal will guide you through the development and completion of a grant budget. If you are new to budgeting, work with your financial director to assure you have the correct details for all costs especially personnel.
Creating a grant budget takes time and effort. You must research each cost center listed on your total project budget. This will assure that your numbers are real and not “a best guess effort’. The funders who review the budget section of your grant are well aware of the costs of doing business whether you live in Chicago, Illinois or Hegins, Pennsylvania. So make sure you use sound resources for developing your budget.
A well researched and fully developed budget will go a long way to getting your grant application awarded. Best wishes with your next budget