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:
- 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.
- Double-check your numbers to make sure the budget adds up.
- Provide enough detail so that it answers the funder’s questions. Footnote line items in the budget that require explanation.
- Do research so that your expense items are as close to reality as possible.
Ann C. Fitzgerald is Founder and President of AC Fitzgerald, using her decades of experience in fundraising, management, leadership, and sales to help nonprofits build their capacity and achieve success. She is a sought-after speaker, writer, and advisor.