5 Grant Writing Budget Tips Every Nonprofit Should Know

It’s time to talk about one of the least sexy (but arguably most important) parts of a grant application: your budget. Gasp!

Grant budgets are kind of like the broccoli of a grant proposal, definitely not the most exciting part, but good for you and absolutely necessary. If your numbers don’t make sense, it doesn’t matter how beautifully written the rest of your application is, you’re probably landing in the declined pile.

After reviewing (and writing) more nonprofit grant budgets than I can count, I’ve seen the same challenges come up again and again. So here are five practical, field-tested tips to help you avoid common grant budget mistakes and give funders the confidence to say yes.

1. Balance Need with Stability

Funders want to make a meaningful impact, but they also want reassurance that your organization can carry the project forward. That means your budget needs to reflect both need and stability.

If your program is financially strong: use your budget narrative to show how additional funding would allow you to expand or strengthen your impact. Highlight your plans to increase program hours or serve more participants. If your budget looks stable now, but you know you’re about to lose a key funding stream, include a note explaining that context.

If you're in the early stages of funding: Demonstrating stability is your challenge. Focus on what you are doing to build that foundation. Highlight other grants you’ve applied to, share where in-kind support is helping to fill gaps, and show that you’re approaching sustainability with a clear, proactive plan.

2. Be Mindful of Administrative Expenses

Administration is often misunderstood and underfunded. While many grantors still expect administrative costs to stay around 10%, this is an outdated standard that doesn’t reflect the true cost of running a sustainable nonprofit. Dan Pallotta’s Ted Talk is a helpful reference: strong organizations need strong infrastructure!

That said, it’s important to work within each funder’s parameters. If a funder allows limited admin, look for ways to fairly allocate related costs as project expenses. Be transparent and realistic while respecting the funder's expectations.

3. Explain Deficits, Surpluses, or Red Flags

If your budget or financials show a deficit, surplus, or anything that might raise questions, don’t leave it unexplained. Funders review your financial statements and may make assumptions if the details aren’t clear.

For example, if your audited financials show a deficit due to a one-time expense or a delayed payment, say so. If you have a surplus that’s earmarked for a future program or reserve fund, include that in a note. Transparency builds trust!

4. Be Specific and Measured

Vague budgets are a common grantmaker pet-peeve. If your line items are too broad (e.g. “program expenses” or “supplies”), funders won’t know exactly what their money is supporting. Break each item down: what kind of supplies? For how many people? How often?

And just as importantly, don’t guess your numbers. Use last year’s actuals, get vendor quotes, or even do a quick google search to see how much things will cost. This is especially helpful when it’s time to report back to the funder.  Inaccurate or unrealistic numbers can impact your credibility and future funding potential. It can also leave you in a sticky spot when project costs turn out to be way higher than expected!

5. Always Read the Grant Guidelines!

Before you even start drafting a budget, read the grant guidelines thoroughly. Every funder is different: some won’t fund staffing; others exclude admin costs entirely. Some prioritize capital projects, while others prohibit them.

Make note of what’s eligible and what’s not and tailor your budget accordingly. Including ineligible expenses can lead to automatic disqualification, even if the rest of your application is strong. By showing that you’ve done your homework and respected the funder’s criteria, you’ll increase your chances of success.

Want a Second Set of Eyes on Your Grant Budget?

Your budget can make or break your grant application, even if the rest of your proposal is rock solid. If you're feeling unsure about how your numbers are coming across (or just want a second opinion), I’d be happy to help.

Book a free consultation call, and let’s talk about how I can support you.