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Words don't go with my budget, right? The importance of a good budget narrative

As I was recently finishing up a federal grant for a client by wrapping up the budget narrative, I had a flashback to my beginning days of grant work when I wondered what on earth a budget narrative was. Fast forward to today, and it is one of my favorite application parts and as a grant reviewer, it's a very telling one.

Time and time again, while reviewing grants, the budget narrative has been the main reason for point reductions. Why? Glad you asked. Here are the top 4 reasons why budget narratives have been the downfall of a grant application and what you can do to avoid losing points.
It's missing!
By the time my fellow reviewers and I get the grant package for review, most packages that do not meet the minimum requirements are weeded out. But on occasion, I've had to review packages where the budget narrative is missing. Being a good grant professional is in the details, so if something is required, in the words of Nike, “Just Do It!” Not sure where to start? There are plenty of resources within the GPA membership that will provide samples. Also check your funder's application pages to see if they have samples or suggested formatting. Don't let this one attachment get the best of you.
It's a regurgitation of the budget but in a Word Doc
I can tell when what is included as the ‘budget narrative' is simply just cut and pasted from Excel into a Word document. Maybe the thinking is ‘well Word is used to write, so if I just put the budget in Word, that counts, right?' Nope!
Think of the budget narrative as an ‘extra' space to explain what you are trying to do but with more numbers (I should be hearing cheers from the number fans). Now fair warning, on the flip side, you can't use the budget narrative as a way to get around page limits on the program or project narrative. Itemize everything you can in this attachment so the funder and reviewers, if applicable, can see where all funds are going.
The personnel in the program description doesn't match
If you mention your program coordinator Suzie, Suzie had better be in the budget narrative! Even if, for example, she's 10% grant funded but 50% of her time is devoted to the project, so 40% of her time is in-kind or funded by other streams. Make sure to note all those details and nuances.
Another people issue can be an evaluator. Make sure you are putting any evaluator expense in the right place. Typically, that isn't found in personnel, but always check the funding announcement to be certain. If all else fails, check the FAQs, if there are any and then reach out to the funder if you still haven't found the answer.
Also, make sure to get, in advance if you haven't already, a breakdown of your benefits cost. At a previous employer, ours was always a straight 27% of salary amount. The accounting department had a great breakdown of how that was calculated and, thankfully, updated it every year as things changed. When it came time for budget narratives, our benefits section was spot on.
Mismatches can occur in any category, not just personnel. When drafting the budget narrative, match the amounts described to the budget worksheet and the project narrative. Even go so far as to cite the page number from the project narrative in the budget narrative. This will ensure your programmatic objectives and activities are directly linked to the costs to carry them out.
In-kind expenses are not described and thus it looks like the effort proposed isn't sufficiently funded
In addition to staff in-kind, all other in-kind expenses should be described. If you are utilizing currently funded resources like office space or facilities, supplies, telephone, and other smaller items that are vital to your program, put them in the budget narrative. If your budget spreadsheet or grid does not allow for in-kind, take the opportunity in the budget narrative to explain what items are being used or provided in-kind for the program or project. If you are using a gymnasium for an after-school program, which is included in the project narrative, and it's not mentioned in the budget or budget narrative, your reviewers may subtract some points.
All in all, budget narratives do not have to be the scourge of the grant world. The biggest area of improvement for most budget narratives is matching the costs discussed back to program goals, objectives, and activities. Cross reference where you can, and if your logic model allows for it, include the costs or in-kind amounts in the resource's column, or better yet, have a whole budget column. Take the budget narrative challenge head on and make your great applications even more awesome.
Ericka Harney, CAGS, GPC, CFRE, CAE, CVA has over 19 years of experience in fundraising, grant development, board training, strategic planning, social entrepreneurship and program effectiveness. She is owner of Ericka Harney Consulting and is an instructor with Grant Writing USA. Ericka is a GPA Approved Trainer and has been a presenter at GPA conferences as well as other conferences worldwide. Ericka is a GPC Ambassador and a CFRE Ambassador. She is a past board member of the Grant Professionals Foundation and the Grant Professionals Certification Institute and currently serves on the board of GPA Miami Valley Chapter, the AFP Greater Springfield (Ohio), and the International Book Project. Ericka is finishing up a PhD in Nonprofit Organizational Leadership at Eastern University.

GPC Competencies: 04. Effective Grant Application, 06. Ethical Practice, 09. Case for Funding