GRANT BUDGET BLUES: | Installment #4 of 5: Talk to Me! Budget Narratives


Budget narratives are the deign of the finance person’s existence. Shouldn’t we all just GET what the numbers are there for? But lo, the NARRATIVE tells the STORY of the numbers in your budget – to the people who need to understand it in order to inve$t in you!

I look to a budget narrative to explain figures you arrived at, line by line, referencing the line in the budget.

For example, reviewers expect to see:


  • Clinical Director, 1.5 FTE @ $ XXX/yr., plus benefits. [Staff person’s name] @ 1.0 FTE, will transition to this position from her ABC role. The remaining .5 FTE will be hired to fill the role on a PT basis.
  • Program Director, 1.0 FTE @ $ XXX/yr., includes benefits. [Staff person’s name] will serve in this role.

No need for job description or qualifications, since they appear elsewhere.

I use this opportunity to explain (in words) why your program may overspend or underspend the award amount, if needed. Different staff in positions at the onset of the grant than at proposal submission? Fewer clients seen because of a lapse in a key position? Explain any difficulty of accurately capturing all eligible work that staff were providing outside of direct clinical contact, such as staff meetings, case consultations, record keeping, outreach programming, resource development, and case management and eligible administration time.

FRINGE BENEFITS: For Fringe, detail each employee’s insurance and other benefits. Please explain what rate you calculate and account for any potential raises (cost of living, etc.) over the grant cycle. Remember, the rate can be broken out here by FICA and other taxes, insurance, and what you pay out in other benefits. For Payroll Taxes, detail each salaried employee’s taxes (usually noted as a percentage with a total).

If a staffer is on contract, state that in the budget narrative in your line item (or list them under Consultants). For instance:

  • OT, 1.25 FTE @ $ XXX. Contracts to be fulfilled by [OTs ‘R’ Us].

SUPPLIES: For items usually under $5,000 and they should be bundled as much as possible (but still be clear AND TRANSPARENT!)

EQUIPMENT: Any durable goods over $5,000 should be explained as to their EXPLICIT purchase for the direct service to the grant. If only a portion of the item’s useful life is involved in service of THIS grant, then include that percentage and explain your calculation.

TRAVEL: Whether mileage (tell me the federal rate you calculated for land travel for day trips, who is traveling (which staff position), and their to and from destinations), or airfare (tell me purpose of trip, origin and destination city, spell out rental cars, hotel, per diem, other)

IN-KIND: Account for any donations (see my Budget Blues Blog Installment #3) of cash or goods/services, and explain the donor’s relationship and the intended use of the donation. Back it up with agreements.

The budget narrative is your chance to make the program costs (marketing, personnel, conferences, etc., etc.) count in your budget. A fleshed-out budget is a good way to communicate to your potential funder that you are being thoughtful about your program and its expenses, so they will want to contribute to your INCOME!

Hopefully you get the picture. Send me a comment and let me know. Thanks for reading along! Look for the final installment on Budgets and your CFO next month.

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