Budgets and Timelines

Budgets Tell Your Story in Numbers

Your narrative explains what you will do. Your budget proves you can actually do it. A realistic, well-justified budget is one of the strongest signals of organizational competence a reviewer can see.

By the end of this lesson, you will build grant budgets that justify every dollar and create project timelines that demonstrate careful planning.

Quick Recall: In the previous lesson, we structured proposals with SMART objectives and logic models. Every budget line item should connect back to those objectives and activities. If a cost does not support a stated activity, it should not be in the budget.

The Standard Budget Categories

Most grant budgets use these categories:

Key principle: every line item must connect to a project activity. If you cannot explain how a cost supports your stated objectives, remove it.

Building the Budget Line by Line

For each line item, document:

1. What: The specific cost
2. How much: The dollar amount with calculation
3. Why: How it supports project activities
4. How calculated: Show your math

Example:

Project Coordinator (1 FTE) — $48,000
Calculation: $48,000 annual salary x 1.0 FTE x 12 months
Justification: Manages daily program operations, coordinates
with partner organizations, and supervises program staff.

AI-assisted budget building:

Help me create a detailed grant budget for this project:

Project: [DESCRIBE YOUR PROJECT]
Duration: [MONTHS/YEARS]
Key activities: [LIST YOUR MAIN ACTIVITIES]
Staff needed: [ROLES AND APPROXIMATE TIME COMMITMENT]
Location: [WHERE THE PROJECT OPERATES]

Create a line-item budget with:
1. Realistic salary estimates for each role
2. Appropriate fringe benefit rates
3. All necessary supplies and materials
4. Any contractual services needed
5. Indirect cost estimate
6. Total project cost

Show calculations for every line item.
Include a brief justification for each cost.

Quick Check: What four pieces of information should you document for every budget line item?

The Budget Narrative

The budget narrative is where numbers become a story. For every major cost category, explain:

• What the cost covers
• How you calculated the amount
• Why it is necessary for the project
• How it connects to specific activities or objectives

Budget narrative example:

Personnel ($72,000) The project requires a half-time Project Director ($36,000 = $72,000 annual salary x 0.50 FTE) who will oversee program implementation, manage partnerships, and ensure quality. A full-time Program Coordinator ($36,000) will handle daily operations, participant recruitment, and data collection. Salary levels reflect current market rates for comparable positions in our region.

AI can draft your budget narrative:

Write a budget narrative for these line items:
[PASTE YOUR BUDGET TABLE]

For each category:
1. Explain what it covers and why it is needed
2. Show the calculation methodology
3. Connect costs to specific project activities
4. Note any cost-sharing or matching funds

Common Budget Mistakes

Building Project Timelines

A timeline shows reviewers you have thought through implementation sequencing.

Timeline format:

Timeline principles:

• Start with hiring and setup (nothing happens without staff)
• Allow time for recruitment before programming begins
• Build in evaluation milestones throughout, not just at the end
• Include reporting periods required by the funder
• Be realistic about how long things actually take

Quick Check: Why should a project timeline include time for staff hiring before programming activities begin?

Matching Funds and Cost-Sharing

Many funders require or prefer cost-sharing, where your organization contributes resources.

Types of matching:

• Cash match: Your organization’s own funds
• In-kind match: Donated goods, services, or volunteer time
• Partner contributions: Resources from collaborating organizations

Calculate in-kind value carefully:

• Volunteer time: Use Independent Sector’s published rate (currently around $30/hour)
• Donated space: Fair market rental value
• Donated materials: Current market price

Document all matching in the budget with the same rigor as requested funds.

Try It Yourself

Build a practice budget:

1. List the main activities from your project description
2. Identify what each activity requires (staff, materials, travel, etc.)
3. Research actual costs in your area for each item
4. Create a line-item budget with calculations
5. Draft a one-paragraph budget narrative for the personnel category
6. Create a 12-month timeline for your project

Even a rough budget reveals whether your project is realistic at the scale you proposed.

Key Takeaways

• Budgets demonstrate competence and planning ability, not just costs: show your math for every line item
• Budget narratives explain and justify each cost, connecting dollars to specific activities and objectives
• Avoid round numbers, missing fringe benefits, and costs disconnected from project activities
• Timelines should sequence realistically with hiring and setup before programming and evaluation throughout
• Document matching funds and in-kind contributions with the same precision as requested funds

Up Next

In Lesson 6: Writing Persuasive Narratives, we will bring all the proposal components together with writing that is clear, compelling, and impossible for reviewers to put down.