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Focus on the cost-benefit ratio. Clarify how grant dollars will be maximized through a frugal budget, how the grant will leverage other funding, and how the benefits will be long-term.

Budget line items should reflect the values of your organization.  If working with special needs children, then the extra expense of adding a nurse practitioner to the staff can be justified. If working with drug addicts, then hiring individuals with first-hand experience for entry level positions might make more sense than staffing the project only with more expensive licensed therapists.

Check for consistency between the project description, budget narration, and budget line items.

Far too many organizations arbitrarily request an extra computer or half-time clerical assistant with every application submitted; foundations recognize these common tricks as unnecessary budget inflation.

Aim for management efficiency.  If your Executive Director position is already funded through a government contract, then five percent of this individual’s time can be allocated for project oversight at no additional cost. Recruit a board member or local expert to donate training services or fiscal management services, then show this inkind contribution in the budget.

If major pieces of equipment drive up total budget costs, investigate whether the equipment can reasonably shared with other nonprofit organizations or whether second-hand equipment would provide a reasonable substitute.

Include an inflation factor and projected salary increases when applying for multi-year grants.

Some grant experts recommend that budgets aim for no more than 40% personnel costs, with 60% for direct program support. Of course, this guideline does not always apply.

For staff, identify the percentage of time that each individual will spend on this particular project and pro-rate the costs appropriate. Do not double-dip: If your case workers salary is 100% covered by the County Department of Mental Health, then a supplemental 20% of this position’s salary cannot be charged to a different funder. However, the 20% contribution to this project can be shown as a County contribution to the project. In this case, a letter of support from the County would be a helpful supplement to your proposal.

Calculate fringe benefits and payroll taxes on the exact cost percentage, based on information from your human resources department and the specific job classification. Remember that management positions sometimes include additional benefits, not available to other staff.

Government funders will often allow the fair market value of furniture, computers, equipment, and a designated percentage of office space to be included as part of the required nonprofit financial match. However, this type of overhead cost is usually not appropriate for private foundations that prefer a designated cash match.

Beware of including minimal costs for letterhead, postage, photocopying, and utilities, if not essential to project operations. The funder might perceive these expenses as part of normal operating costs and view relatively trivial line items as artificial budget inflation. However if your project involves public outreach with mass mailings, then nonprofit bulk rate postage and reasonable printing would be appropriate and significant budget items.

Keep training costs reasonable. Many foundations are suspicious of overinflated figures in this category. If your staff has the capacity to perform the project activities, then why would extensive outside consultants and out-of-state seminar attendance be needed?

Be cautious about including non-essential travel in the budget for a project that only has local impact. If conference attendance is of vital importance for project effectiveness or results disseminations, identify the conference and provide ample justification in the budget narration.

Use only whole numbers (no cents) with proper formatting: $1,270 (not 1270).

For pilot projects, a modest “contingency” line item might be appropriate, but allowed expenditures must be carefully defined and examples given.

Do not include a “miscellaneous” budget category. Small expenses should properly be allocated for supplies, transportation, photocopying, or a similarly appropriate category.

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