THE GRANT BUDGET NARRATIVE

The budget narrative is a key component of your grant proposal. It is your opportunity to justify your budget
in succinct, didactic terms. The grantor needs to know how the funds will be spent, in what manner they will
be spent, and in what amount they will be spent. This is your chance to justify your proposal in dollars and
cents. The narrative may present the most critical information that the grantor needs when assessing the
various proposals.

The budget must be consistent throughout the proposal. Grantors look for consistency in all facets of the grant
proposal budget, but especially in these areas:
• Salaries: The salaries for your project must be in line with the salaries of similar job classifications in your
organization. For example, if you are paying a case coordinator $17 per hour, and your budget line for the
case coordinator position on your proposed project is $24 per hour, this sends a red flag up for the grantor.
• New Staff Hires: If your proposal includes the hiring of additional personnel, grantors will look to make sure
that you have included additional space and equipment accommodations in the budget.
• New Equipment: If your proposal calls for the purchase of new equipment, make sure that it is the type
allowable by the grantor. If you are unsure, then it is best to check with the grantor before you submit a
budget for non-allowable equipment.
• Indirect Costs: If you have included indirect costs in your proposal, such as administrative salaries, make
sure that you use the indirect cost rate that is required by the RFP of the grantor. If you are not sure what the
grantor has established as the indirect cost rate, then contact the grantor to obtain the information and utilize
the correct figures in your budget.

In your budget narrative, you need to list and describe all overhead costs, which include direct, indirect and
fringe benefit costs. Make sure you use the required percentage fee to calculate the fringe benefit cost for
each employee. The fringe benefit cost for each employee is the total worth of the employee package,
including insurance coverage, disability payments, etc. Also describe other costs essential to the project, such
as travel, construction, renovation, supplies, and material costs. The more you can justify these expenses, the
more appealing your budget will be to those who decide on the grant recipients. The more detailed you are in
the budget narrative, the clearer you will state your case for the grant.
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 Critical Areas in the Grant Narrative

The grant narrative is perhaps the most scrutinized section of your grant proposal. For that reason, your grant
narrative should be:
• Written in a thoughtful and logical manner. Narratives that jump all over the place or those that do not
adequately describe the expenses and their rational in a logical and organized way lose the reader’s interest. If
that occurs, you have also lost the grantor’s interest in your proposal.
• Written clearly and concisely. The reader must be able to understand the points you make in the narrative.
Therefore, you must write as if the reader had no prior knowledge of your proposal.
• Mathematically correct. You need to ensure that your mathematical computations are compatible
throughout the entire proposal as well as with your figures on the budget form.
• Compliant with the Grantor’s Requirements. You need to ensure that you follow all the guidelines and
limits as outlined in the grantor’s RFP or in the application packet. Your proposal can easily be disqualified if
you fail to follow the directives outlined by the grantor.

The budget narrative must contain your explanation for expenditures necessary to meet the program’s goals
and objectives. Make sure to provide line item totals, and offer reasons for any budget item whose cost
appears incongruous with other budget items, such as equipment, materials, capital expenses and contract
services. Compute your total costs as indicated on your budget, and match that total with the budgetary
constraints of the grantor as delineated in the RFP. If your budget exceeds the guidelines of the grantor, you
will need to review and adjust your line item budgetary computations accordingly.

The budget narrative is a crucial component of your proposal package. For this reason, you must prepare it
meticulously and you should review all of its details prior to submission. Otherwise, you may waste precious
time and energy preparing a grant proposal that will be rejected because of avoidable mistakes.

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