Grant Basics: How to Write a Budget Narrative

So you’ve put in the hours and carefully calculated your estimates in a well-researched budget for your grant application; but can those numbers alone convince the grantmaker to fund your idea? Here’s where a budget narrative can help your grant application. In this blog post, we’ll explain what a budget narrative is, what it looks like, and what makes it so essential. Finally, we’ll share tips for how to craft your own budget narrative that will transform your application.

What is a budget narrative?

A grantmaker might request a budget narrative when you request funding for a specific project or program, or when they’re interested in more information about your annual organizational budget.

A budget narrative consists of descriptions of each line item in your budget. In a few sentences per line item, you should explain the expense and provide rationale for why you’re requesting funding for the item. You might also include an explanation of how you came up with the amount requested for the item.

The importance of each line item may seem obvious to you as someone who knows the ins and outs of your project or organization; consider what someone reviewing your proposal for the first time would need to know to be convinced of the importance of each item in your budget. In short, a budget narrative for a grant should demonstrate to the grantmaker that each line item is absolutely necessary for the success of your project or organization.

Some questions to consider while writing your budget narrative include:

• Why is this item necessary? What makes it better than its alternatives?
• How will this item sustain the impact of my project or organization in the long-term?
• How might the cost of this item change over time to fit the needs of my project?

The types of budget line items you describe in your budget narrative will vary depending on your proposal, but common budget items might include:

• Personnel (Staffing/Salaries)
• Travel/Transportation
• Technology/Equipment/Supplies
• Marketing/Outreach
• Trainings

What’s an example of a budget narrative?

Let’s say your proposal is for a project that aims to increase educational and professional development opportunities for low-income youth. Your budget narrative might include details like this:

Travel & Transportation

Conference Attendance: $4,410.00

• Airline tickets: $150/person x 10 students, 2 program leaders = $1,800.00
• Lodging: $95/night x 3 nights x 6 rooms (2 people per room) = $1,710.00
• Conference Admission: $75/person x 10 students, 2 program leaders = $900.00

10 low-income students in our organization’s program will attend the annual Networking and Professional Development Conference. This is a premier opportunity to meet with peers, learn from professional keynote speakers, and access workshops. In surveys of past conference attendees, 95% of participants said the conference was instrumental in preparing them for professional success. Funding will allow the students to see similar benefits, and to travel out-of-state to the conference. Attending the conference will allow the students to practice the networking skills taught in our program.

Here, a clear numerical breakdown of the conference travel expenses is accompanied by a brief explanation of the conference. This narrative shows that the funding is essential to help students access the conference, which they would not be able to travel to otherwise. The narrative also explains that the conference has measurable impacts on attendees, and that attending the conference enhances student experience in the program.

How to write a budget narrative: tips and best practices

Less is more

Keep in mind that the grantmaker may be reading over hundreds of applications; make yours stand out with clear and concise language that allows them to quickly understand your proposal and see its significance. Unless the funder has established a requirement for a highly-detailed budget narrative, it’s a good practice to keep your narrative brief and to the point.

Avoid jargon

Define any acronyms you’re using, and avoid overly-technical language. It’s important to make your proposal easy to comprehend for any reader. Don’t let a few terms that aren’t well understood by the grantmaker impede their understanding of your whole proposal!

Be transparent

This is especially important when you’re making a big ask. Presenting a realistic budget that has clear consideration behind the estimated cost of each line item will show the funder you’ve made an effort to think your project through.

If you’re receiving funding from other sources, be sure to include this information if the funder asks for it. This is key if the grantaker prefers to fund projects that are supported by others.

Become an expert

Now is the time to assure the funder that you’ve done your research! Cite credible, authoritative sources that influenced why you chose specific line items or your cost estimates. When your proposal demonstrates a high degree of understanding and expertise, it’s all the more convincing.

Connect to the bigger picture

Your budget narrative should link the numbers in your budget to the written details of your proposal, but it’s also important to connect your budget to the broader mission of your organization. Cohesion between your project, long-term goals, and values elevates your proposal and highlights its relevance to all of your organization's operations.

Recruit a fresh pair of eyes

Asking for someone else on your team to review your budget narrative is a great way to get a second opinion on its clarity. Welcoming additional perspectives can refine your budget narrative by revealing areas of improvement or ideas you haven’t yet considered.

Final Thoughts

Writing this part of your application doesn’t have to be difficult - with these tips, you’re well on your way to developing a compelling and concise budget narrative! Give yourself adequate time to write, reflect, and revise, and you’re sure to put together a budget narrative that will complement and enhance your whole application.

Cover Photo by Sasun Bughdaryan on Unsplash