Writing the Budget Narrative
Whether you actually write the budget yourself or you receive one from your executive director or accountant, you do have to write the budget narrative. The narrative is your chance to explain how you developed this budget. Your narrative should include the following details:
Calculations: If the project requires two full-time-equivalent (FTE) counselors, each working forty hours per week at $40,000 per year, you budget $80,000 per year. Over three years they will cost $240,000. (If you need two half-time staff per year, you should request one FTE.)
Other sources of funding if any, and their use.
Distribution of funding for the line item: “Part from matching funds, part from the grant request.”
Justification: “$40,000 annual is the average salary of a certified counselor in this area.”
Estimated or actual cost: “The cost of software packages is $222 each if purchased through the state plan for mass purchases. ABC, therefore, requests twenty packages at an actual cost of $4,440.” Or you can say, “Software packages are estimated at $225 each times twenty for a request of $4,500.”
Remember to include only the costs relating to the particular program and not ongoing administration costs that are not part of the grant proposal, unless you are applying for a general operating grant or attributing the cost to the “indirect” line item. You might even explain what will become of equipment after the project is over.
A budget includes both expenses and revenue; don't neglect to address the revenue side of the budget. Where will all the necessary funding come from?