How to Prepare a Budget for a Foundation Proposal

Ann C. Fitzgerald, President

Virtually all foundation grant proposals require a budget, especially if you are asking for money for a specific project. A well-crafted budget demonstrates:

  • Your project is feasible
  • You have sought out other sources of support
  • You have a thoughtful business plan

Therefore, you want to prepare a budget that correlates to what is outlined in your proposal, rather than submitting something generic.

Let’s assume you are requesting $25,000 from Foundation A for a $100,000 project, which requires your organization to hire staff and hold a conference.

First, divide the budget into two sections: Projected Revenue and Projected Expenses.

Begin the Projected Revenue section by listing the amount requested from Foundation A:

Foundation A (requested):                         $25,000

Then, include the other potential sources of revenue you are seeking to get to the $100,000 mark. Note if the money is currently requested or pledged.

Foundation A (requested):                         $25,000

Foundation B (requested):                         $40,000

Foundation C (pledged):                             $10,000

Individual Contributions (pledged):        $25,000

Total Projected Revenue:                           $100,000

This explains to the foundation how you hope to secure the other funding required to carry out the project. And it is appropriate to simplify this further by grouping “Foundation Grants” in one line rather than listing them individually.

Next, outline the categories of Projected Expenses associated with the project. In this scenario, they might include:

  • Salary and Benefits
  • Conference/Events
  • Marketing
  • Administration

Under Salary and Benefits, include the cost of the new hire, and the percent of his/her time dedicated to the project:

Salary and Benefits

  • Project Director (100%): $50,000

In addition, allocate the expenses related to other staff connected to the project:

Salary and Benefits

  • Project Director (100%):  $50,000
  • President (10%): $10,000
  • Policy Analyst (10%): $ 6,000

Under Conference/Events, provide as much detail as you need to justify expenditures. For instance,

Conferences/Events

  • Room Rental/AV: $10,000
  • Catering: $5,000
  • Honoraria: $2,500

If your proposal describes a marketing effort, then include a description of the expenses:

Marketing

  • Mailings: $ 5,000
  • Advertising: $ 2,500

Finally, Administration covers all the other costs from telephone to office supplies that are required to execute the project. Typically, nonprofits allocate a percentage (such as 10-12%) of the entire project to this line item. To be more precise, you could use the functional expense percentage listed in your audited financial statement as a guideline.

So your final budget would look like this:

Your Nonprofit’s Name

Project Name

Projected Revenue: 

Foundation A (requested):                         $25,000

Foundation B (requested):                         $40,000

Foundation C (pledged):                             $10,000

Individual Contributions (pledged):       $25,000

Total Projected Income:                           $100,000

Projected Expenses:

Salary and Benefits

Project Director (100%)                             $50,000

President (10%)                                             $10,000

Policy Analyst (10%)                                    $ 6,000

Conferences/Events

Room Rental/AV                                           $10,000

Catering                                                             $ 5,000

Honoraria                                                         $ 2,500

Marketing

Mailings                                                            $ 5,000

Google Ads                                                        $ 2,500

Administration (10%)                                   $ 9,000

Total Projected Expenses:                        $100,000

As you can see in this simple example, the Projected Revenue matches the Projected Expenses.

A few other tips:

  1. Don’t exaggerate the budget in hopes that you will get more money. This is a sure way to lose the trust of a foundation; plus, it’s dishonest.
  2. Double-check your numbers to make sure the budget adds up.
  3. Provide enough detail so that it answers the funder’s questions. Footnote line items in the budget that require explanation.
  4. Do research so that your expense items are as close to reality as possible.

For more tips, get a copy of A.C. Fitzgerald & Associates’ 100 Tips, Techniques and Templates for Persuasive Proposal Writing.

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