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The vocabulary of budget development is part of the language required for writing successfully funded grant proposals. This set of entries covers words and phrases from A-C.

ABSOLUTE PRIORITY: An area of focus that a government grant-maker requires without exception as part of an applicant’s proposal, and that if it is absent prevents a proposal from being reviewed, scored, or ranked. It is one of three common types of government funding priority. Also see: Competitive Priority and Invitational Priority.

ACTIVITIES: Logical sequences of actions or steps to be undertaken to accomplish one or more project objectives by applying specific identified resources and strategies to solve a problem or to meet a need within a pre-defined span of time.

ALLOWABLE COSTS: The cost categories or discrete line items that a grant-maker permits or encourages an applicant to include as part of a proposed budget.

ANNUAL PERFORMANCE REPORT (APR): A yearly document that a grant recipient submits to a grant-maker, as required; commonly, it includes a description of project accomplishments, a statement of progress towards attaining project objectives, and project budget information.

APPLICANT: The organization or individual that seeks a grant by submitting a proposal (or an application) for funding. It will be legally responsible for properly managing the funding if a grant is awarded. Also see: Fiscal Agent.

APPLICATION: The total formal document or package that an applicant submits to a grant-maker. It describes a proposed project and its budget and it usually forms the basis for a grant award; often used as a synonym for proposal.

AWARD NOTIFICATION: A formal, written, physical document that a grant-maker typically mails to an applicant; it informs the applicant that it will receive a grant, and it indicates the amount of the grant award and the start and end dates of the grant period.

BUILDING RENOVATION GRANT: A grant of funds intended to be used to repair, renew, or construct one or more buildings or parts of buildings; informally, also called a bricks and mortar grant.

BUDGET: The total estimated cost of all project activities; alternatively a plan for expending funds in a grant award. A budget often may incorporate both revenues (also called income) and expenditures.

BUDGET ITEM: A single element in a proposed budget; it includes a brief description and an amount per project year. Also see: Line Item.

BUDGET JUSTIFICATION: A brief description or explanation defending items in a proposed budget, particularly all those items that reviewers may find questionable.

BUDGET NARRATIVE: Often used as another term for a budget justification, a budget narrative is a brief description or explanation of some or all of the items in a proposed budget.

BUDGET PERIOD: The time-span that any given budget covers, usually any twelve consecutive months, such as a grant-maker’s fiscal year. Also see: Grant Period and Project Period

CAPACITY: A measure of an applicant’s present and future ability to implement and sustain an initiative or project that it proposes for external grant funding

CAPACITY-BUILDING GRANT: A grant designed to create or expand an applicant’s ability to provide services, often of a magnitude and scope similar to those funded through a proposed grant, after that grant expires. Alternatively, a grant intended to create or expand an applicant’s ability to operate more effectively or more efficiently or more sustainably.

CATALOG OF FEDERAL DOMESTIC ASSISTANCE (CFDA): The compendium of all domestic grant programs and other forms of assistance for all federal agencies in the United States of America; its program descriptions provide critical information for potential applicants for federal grants. Its website is

CFDA NUMBER: A unique five-digit code for each federal funding program; it includes a unique two-digit prefix code for the specific federal agency, a dot or point, and a unique three-digit code for each specific funding program. Example: All grants from the United States Department of Education (USDE) are coded as 84.XXX.

CHALLENGE GRANT: A grant from a single source intended to lead to further grants from other sources by committing the grant-maker to award a grant only if the applicant raises the balance of funds from other sources within a certain time period.

COMMITMENT: A measure of an applicant’s present and future internal investment of its own resources, both cash and in-kind, in an initiative or project that it proposes for external grant funding.

COMMUNITY FOUNDATION: A charitable organization that awards grants in a specific community or geographic region. In general, community foundations receive funds from many donors, maintain them in multiple endowments, and use the endowments’ income to fund grant awards. Example: Maine Community Foundation at

COMPETITIVE GRANT: A grant program in which eligible applicants submit proposals, the grant-maker reviews, rates, and ranks the proposals, and the highest ranked proposals are funded down a list of applicants, usually until available funds are exhausted.

COMPETITIVE PRIORITY: An area of focus which a grant-maker would prefer to see as part of an applicant’s proposal; it may affect the rating or the rank ordering of proposals either by the award of additional scoring points or by its use as a tie-breaker.

A later post will cover entries in this glossary starting with letters C-F.


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