In Canada, there are many grants and funding opportunities open to nonprofit organizations and growing businesses. Some are specifically designed to support hiring or skills training, while others are geared toward social development programs or innovative research projects.
Because grants are non-repayable funds provided by a corporation, trust, foundation or governmental department, grant approval is a competitive process. The funder you apply to will want to know how you’re planning to spend their money. So to substantiate your grant application, you’ll need to submit a high-quality grant budget as part of your proposal.
What is a High Quality Grant Budget?
A high-quality grant budget is a complete and accurate outline of your program or project costs and their eligibility under the grant you’re applying for.
Providing a high-quality budget as part of your grant application:
- Increases your likelihood of getting approved
- Makes it easier to run your program since you’ll know exactly how much you can spend
- Helps you prepare an accurate grant report faster when it’s time to report back to your funder
Writing a budget for a grant is not the same as creating your organization’s operating budget.
While an operating budget details your expected revenue and expenses for the coming year, a grant budget outlines the costs associated with the project you’re seeking to fund for the period of time the grant covers.
Not sure how to prepare a budget for a grant proposal? These 3 steps will show you the way.
How to Prepare a Budget for your Grant Proposal
Step 1: Understand the Funder's Requirements
Before preparing your program or research grant budget, check the format required. While some funders will allow you to use your own budget template, others will provide you with a template that incorporates their budget lines and categories.
Pro Tip: If you’re not required to use the funder’s template, align your grant budget with your organization’s chart of accounts to make future reporting easier.
Here are some other key points you’ll want to clarify before writing a budget for a grant.
What specific budget information do you need to provide in the grant proposal?
Does the funder want:
- Information pertaining only to the grant you’re applying for,
- Information about the program or project you’re looking to get funded, OR
- Your overall operating budget
If the request isn’t clear on their application, try to get clarification from the funder. Otherwise, it’s best to default to a program or project budget and provide information that’s consistent with your grant narrative (more about this later).
What type of expenses are eligible and what time period does the grant cover?
- If overhead expenses are eligible, consider adding an additional amount (~10%) to cover costs like your office space, computer equipment or website, or service providers like your outsourced bookkeeper or accountant. Some funders might set a cap on the overhead expenses permitted. Therefore, you should gain clarity from the funder about overhead expenses before creating the budget.
- Understanding the time period covered by the grant will allow you to create a similar timeline for your budget.
What level of detail is the funder looking for?
- If you’re asking for money to pay a salary, some funders will want to know who the salary is being paid to, how much time they’re spending on your program and their annual salary
- If you’re asking for money to pay for an event or gathering, some funders will want to know details like the specific date(s) and precise location
- If the funder does not require a detailed grant proposal budget, you should aim to keep the budget simple. The budget you provide will form the basis of your final report that you will submit back to the funder at the end of the grant. Therefore, it is in your best interest to keep the budget straight forward and only include information that adds value to the proposal.
Step 2: Work with your Teammates to Determine Costs
Creating the budget justification for grants requires working with the team members who’ll be running your program or project to figure out their anticipated needs and the associated costs.
Note that the costs for running your program are considered direct costs, while any overhead expenses that support your organization’s infrastructure are indirect costs. Make sure you use “real numbers” that accurately reflect these costs as you determine what to include in your grant budget.
Here are some items to consider:
- Payroll expenses: Include details about how much time your program or research staff members will be required to spend on your project
- Material expenses: Provide a breakdown of the types and amounts of supplies that you’ll need
- Travel costs: Include information like the number of trips planned and the number of days and people for each trip
- Event costs: These may include the cost of renting a space for your event or hiring audio and visual equipment providers
- Catering expenses: If your event or program will be catered, provide details like the number of people attending and the cost per head
- Gift expenses: While often overlooked, fringe benefits like volunteer thank you gifts and honoraria for speakers should also be included
Here's an example of what you can include in a budget for your grant proposal:
Don’t forget that there may be costs attached to ensuring your program or event is accessible. If your program helps new Canadians work on their English, for example, you may need to budget for childcare for participants who are parents or a translator to help facilitate your program.
Remember: The more time you invest in researching prices, getting quotes from vendors, and checking that all your costs add up, the more accurate and reliable your budget preparation will be. Thoroughly reviewing the information you’ve assembled also ensures you’ll have the necessary resources and technology to successfully carry out your project or program.
Step 3: Make Sure Your Grant Budget Aligns with Your Narrative
In addition to your budget, most funders will want to receive a grant proposal narrative explaining the purpose and goals of your program or project, how it will be executed, and your anticipated outcome.
To improve your chances of getting approved, make sure your grant budget is consistent with your grant narrative. You can do so by checking that anything in your narrative with a cost attached to it is reflected in the budget you’ve prepared.
- If yours is a year-long program, your narrative should clearly state that the program will run for one year, and your budget should reflect the expenses for that same year
- If your narrative states that your program provides English classes to new immigrants, make sure your budget includes any translator payroll expenses, dedicated program staff time, or rental costs for space to accommodate your constituents
With the many funding opportunities available to your organization, it’s worth taking the time to understand how to prepare a budget for a grant proposal. If you need help creating an accurate budget for your grant application, Enkel can help. Contact us to find out how we assist businesses and nonprofits organizations across Canada with their bookkeeping, financial reporting and budgeting.