A successful budget shows in dollar amounts how the organization will pay for the project. It will show salaries, operating costs, and any other costs associated with making the project work properly.

If the grant-seeking organization is trying to raise funds to provide general support, it should enclose an agency budget, which shows income and expenses for the entire organization, and submit it with a request for "unrestricted" funds. If the group wants a grant for a specific project, the budget used should detail the needs just for that project. In general, government grant-making agencies ask for very detailed budgets. Corporations and foundations want budgets with less detail.

Depending on the project, the grant maker may ask for a "justified budget" (also known as a "detailed budget"). This shows fine details on a few income and expense items in the budget. An "in-kind contribution budget" describes the goods and services that are needed to make the project work. This could include work by volunteer staff members or it could be the electronic equipment needed by the organization.

Parts of the Budget

One begins the budget process by determining the length of time the budget will cover. Most organizations create annual budgets, but a budget for a specific project will cover the length of the project; that could be eight months, or it could be three years.

Next, one should estimate what the costs will be. A project's "direct costs" are those that apply only to the project. This might be salaries, office supplies, machinery, and rent. Depending on the organization, it might also be necessary to include "indirect costs," those costs that are shared by all parts of the organization. This might include money for the monthly electric bill, salary for support staff, and the cost of pest control for the facility. Some grant makers such as government agencies state that indirect costs may be only a specific percentage (such as 15 percent) of the entire budget.

Finally, one must estimate the goods and services that will be donated to the project, and how much money, if any, will be received from other sources. An arts center, for example, might expect a certain amount of revenue from ticket sales or the sale of concessions.