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This post is one of a series about what goes into proposals that win grants. Its topic is budget justifications. Its context is the United States of America.

 

The budget often makes or breaks a grant proposal. It is a focal point for deciding its merits. It is also one of the main reasons for asking for funding in the first place. It is vital, therefore, for an applicant to present a clear and well-reasoned budget; otherwise, it can be all for nothing.

 

Tips

 

Clarity is critical. The assumptions underlying line items need to be clear to proposal reviewers. The need for clarifying assumptions increases with the length of a proposal and the size and duration of the grant being sought.

 

Many state and federal agencies require all applicants to explain their assumptions in a budget justification (also called a budget narrative or a budget justification narrative); some private foundations require one as well. Applicants may need to explain every line item in every cost category or only some of them.

 

Always follow the specific grant maker’s instructions for justifying budget line items. If an item is not clear to an applicant’s red team reviewers, it is unlikely to be clear to the proposal reviewer.

 

In preparing an item-by-item budget justification, applicants should:

  1. Present each budget line item in the same sequence as in the itemized budget
  2. Present locally established authority as a basis for calculations (salary schedules, rates, policies)
  3. Adopt regularly updated state or federal per diem reimbursement rates (mileage, lodgings, meals, fares)
  4. Describe or explain factors in the formulas used for specific line items (numbers of units or events, costs per unit or event)
  5. Associate line items with specific goals, objectives, or program design components
  6. Explain unusual or unique budget line items or costs
  7. Use real costs – not estimates – as they exist at the time of application
  8. Avoid vague and opaque line items, such as ‘miscellaneous’ or ‘contingency’
  9. Give only as much detail as will clarify or explain or justify each line item

 

 

This post is one of a series about what goes into proposals that win grants. Its topic is itemized budgets. Its context is the United States of America.

 

Budgets are the epicenter of grant decision-making. Applicants should propose a budget in only the format and degree of detail that a specific grant maker requires. The budget should be cost-effective for the expected benefits and results that a proposal describes. It should be reasonable with respect to the objectives. And it should be adequate to support the proposed activities.

 

Tips

 

In creating an itemized budget, an applicant should:

  1. Propose items that reflect the applicable rules, regulations, review criteria, and instructions
  2. Observe a funder’s limits (e.g., on administrative costs or on indirect costs)
  3. Align line-items with objectives, activities, and the rest of a proposal narrative
  4. Ensure that every line-item is neither a surprise nor a ghost nor a stray
  5. Defend line-items with well-established rates or schedules
  6. Base line-item calculations on actual costs, not arbitrary estimates
  7. Use formulas, where possible, to show the elements of calculations
  8. Calculate costs per participant and/or per unit
  9. Justify calculations with local, state, and/or federal guidelines, as appropriate
  10. Check and recheck the accuracy of all calculations

 

In presenting a budget summary for a grant proposal, it often helps to:

  1. Complete the summarized budget as a spreadsheet or a table
  2. Indicate funds from other sources (e.g., matching cash, matching in-kind)
  3. Complete all applicable budget cost categories for each year of requested funding
  4. Indicate the applicant’s indirect cost rate, if any, and its type and source
  5. Calculate the total cost and the total grant budget request

 

The larger the grant maker and the larger the amount requested, the larger the number of cost categories that may appear in a proposal. Among typical cost categories in a grant budget are:

  • Personnel
  • Fringe benefits
  • Travel
  • Consultants
  • Equipment
  • Materials or supplies
  • Contractual services
  • Other

 

A grant maker, particularly if it is a government agency, may require a budget justification narrative for all or some of the line-items in a proposed budget. Writing such justifications is the subject of another post.

 

 

 

 

Introduction

Revised in mid-2016, this post covers guidance about expense categories in common grant application (CGA) forms. Its context is the United States of America.

 

Context

At least 20 associations of grant makers or other organizations publish a common grant application (CGA) form online. This post explores budget expense categories included in CGA budget information sections. Later posts will explore other elements of common grant application forms. The end of the post explains the abbreviations that it uses.

 

Significance

Proposal budgets delineate how an applicant plans to expend grant funds. A funder’s budget expense categories determine the types of expenditures that an applicant can propose.

 

Expense Categories

Out of the 20 common grant application forms, 11 (or 55%) of them — CA, CO, CT, IL, ME, MO, NJ, OH, TX, WA, and WI — offer no budget expense forms or templates and/or no guidance to applicants about identifying various categories or types of requested project or program expenses.

 

  Common Grant Application Forms
 Expense Category NNG AZ DC MA MI MN NY PA1 PA2  
Salaries and Wages Yes Yes Yes   Yes Yes Yes Yes Yes  
Fringe Benefits Yes   Yes   Yes Yes Yes Yes Yes  
Payroll Taxes Yes   Yes   Yes Yes   Yes Yes  
Consultants Yes Yes Yes   Yes Yes Yes Yes Yes  
Professional Fees Yes Yes Yes Yes Yes Yes Yes Yes Yes  
Travel Yes Yes Yes Yes Yes Yes Yes Yes Yes  
Equipment Yes Yes Yes Yes Yes Yes Yes Yes Yes  
Supplies Yes Yes Yes Yes Yes Yes Yes Yes Yes  
Training Yes Yes   Yes     Yes   Yes  
Printing and Copying Yes Yes Yes   Yes Yes Yes Yes Yes  
Telephone and Fax Yes Yes Yes Yes Yes Yes Yes Yes    
Postage and Delivery Yes Yes Yes Yes Yes Yes Yes Yes Yes  
Rent Yes Yes Yes Yes Yes Yes Yes Yes Yes  
Utilities Yes Yes Yes   Yes Yes   Yes Yes  
Maintenance     Yes Yes Yes          
Insurance   Yes   Yes Yes Yes   Yes    
Depreciation   Yes   Yes   Yes   Yes    
Evaluation     Yes   Yes   Yes      
Marketing       Yes Yes          
Miscellaneous Expense       Yes     Yes      
In-Kind Expense Yes Yes Yes     Yes   Yes    
Other Yes Yes Yes Yes Yes Yes   Yes Yes  

 

All CGA States

 

Analysis

Out of the nine common grant application forms that do provide guidance about project/program budget expense categories: nine (or 100%) mention professional fees, travel, equipment, supplies, postage and delivery, and rent; eight (or 89%) mention salaries and wages, consultants, printing and copying, telephone and fax, and other; seven (or 78%) mention fringe benefits and utilities; six (or 67%) mention payroll taxes; five (or 56%) mention in-kind expense, training or professional development, and insurance; four (or 44%) mention depreciation; three (or 33%) mention maintenance and evaluation; and two (or 22%) mention marketing, and miscellaneous expense.

 

Among the uniquely identified budget expense categories mentioned on common grant application forms are: subcontractors (AZ); employee-related expenses (AZ); technology (DC); bank/investment fees (MA); food costs (MA); fundraising/development expenses (MA); pro-rated general and management expenses (NY); and telecommunications (PA-2).

 

Sources

Below is a list of abbreviations used in this post. The common grant application forms are found on their providers’ websites.

  • 1.   NNG: National Network of Grantmakers
  • 2.   AZ: Arizona Grantmakers Forum
  • 3.   CA: San Diego Grantmakers
  • 4.   CO: Colorado Nonprofit Association
  • 5.   CT: Connecticut Council for Philanthropy
  • 6.   DC: Washington Regional Association of Grantmakers
  • 7.   IL: Forefront (Chicago area)
  • 8.   ME: Maine Philanthropy Center
  • 9.  MA: Associated Grantmakers
  • 10. MI: Council of Michigan Foundations
  • 11. MN: Minnesota Community Foundation
  • 12. MO: Gateway Center for Giving
  • 13. NJ: Council of New Jersey Grantmakers/Philanthropy New York
  • 14. NY: Grantmakers Forum of New York
  • 15. OH: Ohio Grantmakers Forum
  • 16. PA-1: Philanthropy Network Greater Philadelphia
  • 17. PA-2: Grantmakers of Western Pennsylvania
  • 18. TX: Central Texas Education Funders
  • 19. WA: Philanthropy Northwest
  • 20. WI: Donors Forum of Wisconsin

 

Introduction

Revised in mid-2016, this post covers guidance about revenue sources in common grant application (CGA) forms. Its context is the United States of America.

 

Context

At least 19 state and regional associations of grant makers or other organizations in the United States publish a common grant application (CGA) form online. This post explores CGA budget information sections in terms of the applicant’s various possible sources of revenue.

 

An earlier post explored CGA requirements for elements of proposals ranging from Cover Letters to Attachments. Later posts will explore other elements of common grant application forms. The end of the post explains the abbreviations that it uses.

 

Significance

Descriptions of  funding sources indicate how an applicant plans to leverage other resources. A funder generally expects an applicant to leverage resources in order to maximize the chances for long-term sustainability and in order to broaden the potential impacts of its funding across a pool of applicants.

 

Applicant Sources of Revenue

Out of 19 state and regional common grant application forms, six (or 31.6%) of them — CA, CT, ME, MO, NJ, and WI — offer no budget forms or budget templates and/or no specific or detailed guidance to applicants about identifying income sources or other project budget resources.

 

  Common Grant Application Forms
Revenue Sources AZ CA CO CT DC IL ME MA MI MN MO NJ NY OH PA1 PA2 TX WA WI
Government Grants X   X X X X   X X X X X X   X X X X X
Government Contracts X   X X X X   X X X X X X   X X X X X
Foundations X   X X   X   X X X X X X   X X X X X
Corporations X     X X X     X X X X X   X X X X X
Federated Campaigns X     X X X   X   X X X X   X   X X X
Individuals X   X X X X   X X X X X X   X X X X X
Fundraising Events X   X X X       X X X X X X X X   X X
Fundraising Products       X X       X X X X X   X X     X
In-Kind Support     X X X     X X X X X   X X X X   X
Earned Income X   X X X     X   X X X   X   X X X X
Investment Income X     X           X X X X   X       X
Membership Income X     X X       X X X X X   X X X   X
Workplace Giving     X                             X  
Other Support X       X     X X X X X     X X X   X

 

All CGA States

 

Analysis

Out of 13 common grant application forms that furnish project budget or income source guidance, 12 (or 92.3%) mention government grants, government contracts, foundations, and individual contributions; 11 (or 84.6%) mention fundraising events; 10 (or 76.9%) mention corporations, in-kind support, and earned income; nine (or 69.2%) mention federated campaigns (e.g., United Way), membership income, and other support; seven (or 53.8%) mention fundraising products; four (or 30.7%) mention investment income; and two (or 15.4%) mention workplace giving.

 

Among the uniquely identified applicant income sources mentioned on common grant application forms are: religious institutions (NNG); endowed income (AZ); business (CO); an in-kind support types list (DC); interest income (MA); miscellaneous contributions (NY); miscellaneous revenue (NY); program service fees (NY); fundraisers (OH); board contributions (TX); and interest income (TX).

 

Of the 13 state and regional common grant application forms that do provide some manner of explicit and/or detailed guidance to applicants, the most minimally differentiated guidance — and thus, potentially, the least useful for users — is found in the common grant application form for OH. For example, it uses the term ‘Other Funders’ without further elaboration about possible types.

 

It may be worth noting that most of the 14 common grant application forms distinguish between government grants and government contracts and between fundraising events and fundraising products, and half of them distinguish two or more types of ‘income.’

 

Sources

Below is a list of abbreviations used in this post. The common grant application forms are found on their providers’ websites.

  • 1.  AZ: Arizona Grantmakers Forum
  • 3.   CA: San Diego Grantmakers
  • 4.   CO: Colorado Nonprofit Association
  • 5.   CT: Connecticut Council for Philanthropy
  • 6.   DC: Washington Regional Association of Grantmakers
  • 7.   IL: Forefront (Chicago area)
  • 8.   ME: Maine Philanthropy Center
  • 9.  MA: Associated Grantmakers
  • 10. MI: Council of Michigan Foundations
  • 11. MN: Minnesota Community Foundation
  • 12. MO: Gateway Center for Giving
  • 13. NJ: Council of New Jersey Grantmakers/Philanthropy New York
  • 14. NY: Grantmakers Forum of New York
  • 15. OH: Ohio Grantmakers Forum
  • 16. PA-1: Philanthropy Network Greater Philadelphia
  • 17. PA-2: Grantmakers of Western Pennsylvania
  • 18. TX: Central Texas Education Funders
  • 19. WA: Philanthropy Northwest
  • 20. WI: Donors Forum of Wisconsin

 

The vocabulary of budget development is part of the language required for writing a winning grant proposal. Revised and expanded in mid-2016, this final set of entries covers words and phrases from R to Z. Its context is the United States of America.

 

RESTRICTED FUNDS: Funds that a grant recipient may use only for predetermined purposes – such as those defined in the approved budget of a funded grant proposal – and that consequently it cannot expend as general funds. Also see: Unrestricted Funds.

 

REVIEW PANEL: A group of peers or experts retained by a grant maker to evaluate the merits of grant proposals in a grant competition and to recommend which ones should be funded. Sometimes the reviewers may include one or more directors or trustees of a foundation.

 

SALARIES: The compensation of professional and technical personnel – who are typically limited only to those holding a post-secondary degree – before the addition of fringe benefits.

 

SEED MONEY: A grant award intended to help start a new project or initiative or to launch a new non-profit organization. It also may be called a Start-Up Grant.

 

SELECTION CRITERIA: The formal set of factors a grant maker uses in scoring and ranking a set of competitive proposals to determine which ones it will select for funding. It also may be called Criteria or Review Criteria.

 

SINGLE POINT OF CONTACT (SPOC): A person in state government whom an applicant must inform when it is applying for a federal grant in the United States of America. A list of single points of contact is maintained at the federal Office of Management and Budget. Some states have a SPOC, others don’t.

 

SOFT FUNDS: A non-technical term for the funding of staff positions or other resources using grant funds rather than other means such as revenues from tax levies; it reflects the premise that such assets are not as secure, over the long term, as those funded using other means (e.g., annual tax levies). Also see: Hard Funds.

 

STANDARD FORM: A blank template that an applicant must complete and submit, as each specific program requires, with its application for a federal grant. A comprehensive collection of standard forms is available at the federal General Services Administration, but be certain to observe strictly the cautionary guidance available at this site.

 

SUB-GRANTEE: A lower-tier recipient (e.g., a county agency) of grant funds from a higher-tier recipient of those funds (e.g., a state agency) and not directly from the grant maker; also called a sub-recipient. Also see: Grantee.

 

SUPPLANTING: A deliberate shifting or displacement in the source of funds (e.g., state or local) used to afford a given resource (e.g., personnel) in an organization because of the availability of federal grant funds after a new grant award. One caveat in many government grant programs is “Do not supplant.”

 

SUPPLIES: A cost category for consumable resources such as paper, pens, pencils, postage, folders, files, binders, paperclips, toner, blank data storage media, and similar office products. Definitions and thresholds for value of the discrete items vary widely across grant programs and funding agencies. Also see: Materials.

 

SUSTAINABILITY: A measure of the perceived likelihood that an applicant (and its partners, if any) will be able to obtain and use funding (and other resources) from itself and/or other sources to continue its proposed project or initiative after its initial grant funding ends. Grant makers of all types often favor proposals that exhibit a high potential for sustainability.

 

TRAVEL: A cost category for costs associated with going place-to-place, including fares (air, bus, train, taxi, or shuttle), vehicle rentals or leases, mileage, tolls, meals, tips, and lodging. Every item assigned to this category must be clearly defined and well justified.

 

UNALLOWABLE COSTS: The cost categories or discrete line items that a grant maker forbids or discourages an applicant to include as part of a proposed budget. Also see: Allowable Costs.

 

UNIFORM APPLICATION FORMS: The standard forms that applicants must complete and submit with applications for federal grants; several of them require specific or detailed budget information. Examples: SF-424 and SF-524. In federal programs, these are associated with specific notices of grant opportunities posted on http://www.grants.gov.

 

UNRESTRICTED FUNDS: Funds from a grant or any other source that an organization may use for any legal purpose, such as general funds or operating funds. Also see: Restricted Funds.

 

WAGES: The hourly compensation of non-professional personnel – typically all of those who do not hold a post-secondary degree – before the addition of fringe benefits, if any.

 

ZERO FUNDING: The termination of a grant program authorized by law or regulation by ending all appropriations for funding it.

 

This post concludes a seven-part series on Budget Development. A later series of posts will present a Proposal Development Dictionary.

 

The vocabulary of budget development is part of the language required for writing a winning grant proposal. Revised and expanded in mid-2016, this final set of entries covers words and phrases from O to R. Its context is the United States of America.

 

OPERATING SUPPORT GRANT: A grant that supports the general purpose or work of an applicant, and as such may be used as general revenue or unrestricted funding.

 

OTHER: A cost category commonly used in state and federal grant programs for budget items that do not fit other categories. Every item assigned to this category should be as clearly defined and as well justified as every other item in a proposed budget. Avoid using this cost category for budget line items vaguely identified as “contingency” or as “miscellaneous.

 

OVERHEAD: See: Indirect Costs.

 

PASS-THROUGH FUNDING: A scheme for the distribution of funding where a first tier of grant recipients (e.g., state agencies) administers a grant program, awards sub-grants to a second tier of eligible applicants (e.g., school districts); and performs a yearly program audit of the second-tier grant recipients. It also may be called Flow-Through Funding.

 

PERSONNEL: A cost category for the human resources or labor, internal to the applicant as an organization, who will be involved in implementing a project; it includes positions paid in salaries and those paid in wages, and it excludes all independent contractors (e.g., evaluators and other consultants). Personnel may or may not be paid out of a proposed grant budget.

 

PRIVATE FOUNDATION: A legally defined type of nonprofit organization whose directors or trustees conduct charitable programs for social, cultural, educational, religious, or other permissible purposes.

 

PROGRAM OFFICE: An administrative unit, within a grant-making organization, that implements or coordinates the details of conducting a grant program, including the review and ranking of applications.

 

PROGRAM OFFICER: An administrator on the staff of a grant-making organization who runs a specific grant program, manages grant competitions, and provides technical assistance either to potential grant applicants or to existing grant recipients or to both.

 

PROJECT: The proposed plan for which an applicant requests grant funds.

 

PROJECT INCOME: The revenue an applicant’s project is expected to generate during a given time-span; it may include products sold, membership dues, service fees, earned interest, and funds raised by other means. It may also be called Program Income or Revenue.

 

PROJECT PERIOD: The total time for which support of a discretionary project has been approved; it is usually a series of one-year budget periods. Most project periods last one to five years; some may be longer, others may be shorter. Also see: Budget Period and Grant Period.

 

PROPOSAL: A written application of vastly varying length and content, submitted to one or more grant makers, describing a plan or initiative to meet one or more identified needs, and requesting partial or full funding for its support. Some grant makers and grant programs require much more formal, detailed, and highly structured proposals – narratives and budgets – than do others. It also may be called an Application or a Funding Request.

 

RECIPIENT: An individual or organization that will receive a grant or has received a grant.

 

REGULATIONS: Administrative guidelines for government grants, issued after enabling legislation, which establish and define eligible applicants; eligible beneficiaries; the nature of activities to be funded; allowable costs; selection criteria for proposal review; and other requirements. Example: Education Department General Administrative Regulations (EDGAR).

 

REPLICABILITY: The proven or predicted ability of a project’s effective activities and strategies to be transportable to another setting and to generate similar results in it; it is a factor in considering the potential impact of an initial grant award and it is a criterion often associated with grant programs that fund demonstration projects. Also see: Demonstration Grant.

 

REQUEST FOR PROPOSALS (RFP): A formal invitation to apply for a grant that describes what types of applicants are eligible to apply; when proposals are due; the program selection criteria; the contents required in a complete proposal; anticipated levels and durations of funding; and other considerations. The specific length and contents of an RFP vary widely from one grant program and one solicitation to another. Also may be called a Request for Applications (RFA) or a Notice of Funding Availability (NOFA).

 

RESEARCH GRANT: A grant designed to support research rather than to support other purposes such as direct services or general operating costs. Also see: Direct Services Grant.

 

A later post will cover entries in this Glossary starting with letters R to Z.

 

 

The vocabulary of budget development is part of the language required for writing a winning grant proposal. Revised and expanded in mid-2016, this set of entries covers words and phrases from I to N. Its context is the United States of America.

 

INDIRECT COST RATE: An annually revised percentage established by a unit of government for a grant recipient that the recipient uses in computing the amount it charges to a grant to reimburse itself for the indirect costs it incurs in doing the work of the grant-funded project. The rate may be final, fixed, predetermined, or provisional. A foundation grant maker also may solicit and approve an applicant’s proposed indirect cost rate before it considers a proposal from it or awards a grant to it.

 

INVITATIONAL PRIORITY: An area of special focus which a grant maker would prefer to see an applicant address in its proposal, but which does not affect the review, rating, or rank ordering of proposals.

 

LEAD AGENCY (Applicant): The organization that submits a proposal on behalf of a partnership of two or more organizations and that serves as the grant recipient. If funded, the lead agency is legally responsible for implementing and administering its funded project, for properly managing all grant funds, and for submitting all required reports.

 

LEAD AGENCY (Grant Maker): Particularly in federal grant making, the agency or program office with the primary responsibility for approving or funding a project. It reviews the proposals, coordinates with other involved agencies, and notifies the applicant of its funding outcome.

 

LETTER OF COMMITMENT: A brief official letter that conveys the willingness of a partner organization to commit cash or other resources to a proposed project; it specifies the terms and conditions of the commitment, the precise resources to be offered or delivered, and the actual or estimated values of those resources. Also see: Letter of Support.

 

LETTER OF INQUIRY (LOI): A brief, but formal, mode of grant application, typically one to five pages long, often used when an applicant seeks a grant from a foundation; it commonly includes an introduction, a problem statement, objectives and activities, an evaluation plan, an organizational capacity statement, and a budget. The letter of inquiry often forms a basis for deciding whether the foundation will request a full proposal from an applicant. Informally, also known as an LOI.

 

LETTER OF INTENT: A brief official letter or email (or other specified form of notification) from a potential applicant to a grant maker that conveys its intention to apply for funding. The grant maker may request or require the letter of intent to gauge the number of applicants likely to be competing for funding in a given grant program. Alternatively, some grant makers may use the term as a synonym for Letter of Inquiry.

 

LETTER OF SUPPORT: A brief official letter that conveys the enthusiasm, endorsement, and encouragement of an individual or an organization for an applicant’s proposed grant project or initiative and for its request for funding, but does not explicitly commit resources to it. Also see: Letter of Commitment.

 

LEVEL FUNDING: An amount of grant funding that does not change from year to year during a multiyear grant period.

 

LEVERAGING: A measure of the potential role that a given grant award is likely to have in attracting other funding or resources to a proposed project or initiative. As the specific grant maker requires, an applicant may present either a ratio of requested grant funds to total project funds or a ratio of requested grant funds to funds from other sources.

 

MARKET VALUE: The economic value of a resource (e.g., volunteer labor at minimum wage) as determined up to the date and time an applicant submits a proposal (e.g., the wage rate in effect on or before that date); often, an applicant determines market value by checking an official government publication or website or by reviewing a grant program’s regulations.

 

MATCHING FUNDS: The share of the total costs of a project or initiative, as required by law or regulation, which comes from any source other than the specific grant being sought; the matching funds may consist of the fair market value of donated resources (in-kind contributions) or of actual cash to be spent (cash) or of both. See the table for examples when an applicant is requesting a $200,000 grant award. Also see: Cost Sharing.

 

Calculating Matching Funds
Match Required Grant maker Share Local Share Total Budget
50% Match = 1:1 $200,000 grant $200,000 local     $400,000
33% Match = 2:1 $200,000 grant $100,000 local     $300,000
25% Match = 3:1 $200,000 grant $66,700 local     $266,700
20% Match = 4:1 $200,000 grant $50,000 local     $250,000
10% Match = 9:1 $200,000 grant $22,500 local     $222,500

 

MATCHING GRANT: A grant awarded to an applicant with the intention of matching some of the funds (i.e., as a partial match) or all of the funds (i.e., as a total match) awarded to an applicant by another source. Also see: Challenge Grant.

 

MATERIALS: A cost category for consumable resources such as media (e.g., books, workbooks, digital videodisks, or software), references, and training products. The category is often conjoined with Supplies or is subsumed as a part of Supplies. Also see: Supplies.

 

MULTIYEAR BUDGET: A budget covering all or part of two or more consecutive fiscal or calendar years. Many grant makers require a budget for an entire multiyear project period at the time of the original application.

 

NON-COMPETITIVE GRANT: A funding program from which applicants are eligible for a grant award if they complete and submit required materials by a given deadline. Also may be called: a Budget Earmark, an Allocation Grant, an Entitlement Grant, a Formula Grant, or a Mandatory Grant.

 

NOVICE APPLICANT: An individual or an organization that has not obtained a discretionary grant directly from a specified unit or level of government (e.g., a federal agency) or from a specified grant program within a defined time-span (e.g., the last five fiscal years).

 

A later post will cover entries in this Glossary starting with letters O to R.

 

The vocabulary of budget development is part of the language required for writing a winning grant proposal. Revised and expanded in mid-2016, this set of entries covers words and phrases from F to I. Its context is the United States of America.

 

FLOOR AMOUNT: The minimum amount allowed as a grant request, often stated as the lower limit of an anticipated funding range. Also see: Ceiling Amount.

 

FORM 990-PF: A yearly Internal Revenue Service (IRS) form required of all private foundations (hence the -PF) that provides a public record of the financial status and grant-making activity of a private foundation. In some respects, Form 990-PF is the equivalent of an annual federal income tax return to be filed by private foundations.

 

FORMULA GRANT: A non-competitive grant whose amount is established by applying a formula based upon criteria described in a law and amplified in that law’s subsequent regulations, and awarded after a yearly formal application process; it may also called an Entitlement Grant or an Allocation Grant or a Mandatory Grant.

 

FRINGE BENEFITS: A cost category for non-salary and non-wage modes of staff compensation that accrue to those who qualify for them. Examples of typical fringe benefits are: health insurance, dental insurance, unemployment insurance, workers’ compensation, paid holidays, paid sick leave, paid personal leave, paid vacation days, and FICA (social security). Fringe benefits are usually calculated as percentages (%) of salaries or wages.

 

FULL-TIME EQUIVALENT (FTE): The financial obligation for one full-time staff member. Two or more persons may split the position in the budget to add up to one full-time equivalent. FTE may be written as a percentage (often abbreviated as % FTE) or as a specific number (N) of hours per week (sometimes abbreviated as N hrs/wk).

 

FUNDING CYCLE: A sequence of events that starts with a formal public notice that funds are available, and includes the deadline for submission of applications, the review of applications, the award of grants, the completion of contractual documents, and the release of funds; the same sequence may recur in subsequent years if funds are available.

 

FUNDING OFFER: A proposal by a grant maker, in oral or written form, to award a successful applicant an amount of funding that is less than it had requested; such an offer may occur when the grant maker either does not allow certain proposed line items in an applicant’s budget or does not have enough funds to fund the project or initiative at the full amount requested.

 

FUNDING PRIORITIES: Project-related factors that grant makers may use to award extra rating-points to otherwise-qualified applicants. Priorities may also include such non-project factors as geographic distribution of grant awards and the diversity of types of funded applicants. Many federal grant programs announce absolute priorities, competitive priorities, or invitational priorities in their requests for proposals. They are also called Funding Preferences.

 

GENERAL GRANT: A grant designed to subsidize the organization-wide operating expenses of a worthy applicant rather than to provide support for a specific project or initiative. Also called an Operating Support Grant or an Operational Grant. Example: Facility rent and utilities.

 

GRANT: An award of funding for an eligible recipient to do pre-defined activities using pre-defined resources over a pre-defined time-span to achieve pre-defined objectives and advance towards one or more pre-defined goals, but whose outcomes are less certain than those expected from a contract.

 

GRANT AGREEMENT: A legally binding and enforceable understanding entered into by a grant recipient with a grant maker; it is commonly based on an approved application made by the grant recipient and it commits the grant recipient to implement certain activities and pursue certain objectives, within a pre-defined time-span, for a specific amount of funding. By reference, it may incorporate other municipal or state or federal statutes and regulations beyond those enabling the grant program.

 

GRANTEE: The organization or individual that receives the grant funds and is responsible for implementing and administering the project or initiative and managing the grant funds; it is also called a grant recipient. Also see: Grantor and Sub-grantee.

 

GRANTOR: The organization (e.g., corporation, foundation, or governmental unit) that awards grants; it is also called the Funder, the Funding Agency, or the Grant Maker. Also see: Grantee and Sub-grantee.

 

GRANT PERIOD: The total time-span for which a grant maker has committed to funding a grant recipient; it may or may not last exactly as long as a budget period or a project period. Also see: Budget Period and Project Period.

 

GUIDELINES: The instructions that describe what the grant maker wants to fund, what applications for funding must contain, how applications – including their budgets – must be prepared and submitted, and how proposals will be reviewed. Also see: Request for Proposals.

 

HARD FUNDS: A non-technical term for the funding of staff positions or other resources that support a program or initiative by using annual tax levies or similarly predictable and renewable revenues rather than by using grant funds; its character reflects the perception that such assets are more secure, over the long term, than those funded using grant funds. Also see: Soft Funds.

 

IN-KIND CONTRIBUTION: A non-cash donation of labor (paid staff or unpaid volunteer), facilities, equipment, materials, or supplies to carry out a project. Applicants for grants must exercise extraordinary care in calculating the cash value of in-kind contributions and in identifying, tracking, and reporting the sources of such contributions. Also see: Matching Funds.

 

INDIRECT COSTS (IDC): A cost category for costs that are not readily allocable to or identifiable with operating a specific grant program; it is also often called Overhead. Indirect costs equal direct costs multiplied by the approved indirect cost rate (IDC = DC x rate). Such costs commonly relate to administration and facilities. Generally, a government agency, as a grant maker, reimburses indirect costs only after it has negotiated and approved an indirect cost rate with the grant recipient. As grant makers, foundations are less apt to allow full or partial recovery of an organization’s indirect costs than are units of government. Also see: Direct Costs.

 

A later post will cover entries in this Glossary starting with letters I to N.

 

The vocabulary of budget development is part of the language required for writing a winning grant proposal. Revised and expanded in mid-2016, this set of entries covers words and phrases from D to F. Its context is the United States of America.

 

DEMONSTRATION GRANT: A grant designed to help an applicant to test, prove, or establish the feasibility or effectiveness of new approaches or new types of services in solving one or more defined problems or in addressing one or more defined needs.

 

DIRECT COSTS: Costs directly associated with operating a project and borne using funds from a grant maker. In government grants, direct costs commonly include: personnel (salaries, wages, and fringe benefits), consultants or contractual services, supplies and materials, equipment, travel, construction and renovation, and other. Foundation and corporate categories for allowable direct costs are typically fewer than government categories. Also see: Indirect Costs.

 

DIRECT SERVICES GRANT: A grant designed to provide services directly to a pre-defined population of beneficiaries rather than to support other purposes such as research or general operating costs. Also see: Research Grant.

 

DISCRETIONARY GRANT: A grant awarded to a recipient selected after a competitive review based upon the judgment of the grant maker or at the option of the grant maker. A discretionary grant program commonly involves a high ratio of applications to grant awards. In the foundation context, a discretionary grant may also be a grant awarded to a recipient based on the judgment of a member of its board of directors or trustees or at the option of a member of its board of directors or trustees.

 

DUNS (DATA UNIVERSAL NUMBERING SYSTEM) NUMBER: A unique nine-digit identification number provided by Dun & Bradstreet (for free) and now required as an identifier for every applicant before it applies for a grant from the federal government.

 

EARMARK: A grant appropriated by a legislative body prior to a peer review. It specifies the applicant’s name, the activity, and the grant amount.

 

ELIGIBLE ACTIVITIES: A circumscribed set of activities for which applicants can propose to spend available grant funds; enabling state or federal legislation often explicitly defines them, and many public and private grant makers also often define them in their application guidelines or on their websites.

 

ELIGIBLE APPLICANTS: Specific and defined types of organizations that may apply for funding from a specific grant program at a specific time. Types commonly include: non-profit organizations, community-based organizations, faith-based organizations, institutions of higher education, state educational agencies, and local educational agencies, and federally recognized American Indian tribes, among many others. Depending upon the specific grant maker and the specific grant program, individuals also are often eligible to apply for grants.

 

ELIGIBILITY CRITERIA: Qualifying factors that a potential applicant must satisfy before it seeks a grant; often they pertain to the type of individual or organization as an applicant or to the persons or geographic area to benefit from a grant.

 

ENABLING LEGISLATION: A law, enacted at any level of government (e.g., city, borough, county, parish, state, federal), which creates and defines one or more grant programs.

 

ENDOWMENT FUND: An account of funds set up to be invested in perpetuity to provide income for the continuous support of a non-profit organization. Some foundations will award grants for endowments.

 

EQUIPMENT: A cost category for durable resources requested in a budget; generally, each discrete item of equipment lasts more than a defined period of time (e.g., one year or three years) and costs more than a defined minimum amount (e.g., $500 or $5,000). Definitions of equipment in terms of durability and minimum cost vary widely among grant makers. Also see: Supplies.

 

EXTERNAL GRANT: A grant awarded to the applicant by any source other than the applicant itself. Example: For a school district, sources of such external grants include the local community foundation, the state education agency, and the federal education agency.

 

FAMILY FOUNDATION: An independent, private foundation that the members of a single family fund and maintain. Example: Davis Family Foundation.

 

FEDERATED GIVING PROGRAM: A collaborative fundraising effort usually administered by a supervising nonprofit organization that in turn distributes the funds generated through that effort as grants to other nonprofit organizations. Example: United Way of Greater Houston.

 

FISCAL AGENT: An organization that has legal accountability for managing a grant award, for expending its funds, and for reporting on grant expenditures.

 

FISCAL SPONSOR: A third-party organization that agrees to serve as the fiscal agent for a grant on behalf of an applicant or a consortium of applicants; some grant makers will permit use of a fiscal sponsor, others will not.

 

FISCAL YEAR (FY): A 12-month period at the end of which the financial accounts are closed for the organization in question. Common fiscal years are: October 1 through September 30 (federal), July 1 through June 30 (states), and January 1 through December 31 (foundations). Organization-wide financial audits commonly occur after the end of each fiscal year.

 

A later post will cover entries in this Glossary starting with letters F to I.

The vocabulary of budget development is part of the language required for writing a winning grant proposal. Revised and expanded in mid-2016, this set of entries covers words and phrases from C to D. Its context is the United States of America.

 

CEILING AMOUNT: The maximum amount allowed as a grant request, often stated as the upper limit of an anticipated funding range. Also see: Floor Amount.

 

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 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: Community Foundation of North Texas.

 

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.

 

CONCEPT PAPER: A short variant of a full-length grant application, often only two or three pages long, that may be used or required for applicants seeking a corporate or foundation grant. At the least, it should include a problem statement, a program narrative, and a budget.

 

CONSTRUCTION: A cost category for the materials used in creating or modifying the facilities where some or all of a project’s activities will take place; by contrast, construction labor itself is a contractual budget line item. Some grant programs disallow construction line items.

 

CONSULTANTS: Individuals or organizations that provide paid professional advice or services to support a grant-funded project or initiative, but which are not in the employ of the grant recipient or its partners; some grant-makers use it as a distinct cost category.

 

CONTACT PERSON: A person or persons of whom a grant maker may ask questions about the content, nature, and scope of an applicant’s proposal. Examples: The proposed Project Director or the applicant’s Executive Director.

 

CONTINUATION GRANT: A grant of additional funding awarded for one or more budget periods following the initial budget period of a multiyear discretionary grant; its award may require the applicant to demonstrate adequate progress during a current funding period.

 

CONTRACTUAL: A cost category for services to be provided by independent contractors in implementing a project. Contractors may be organizations or individuals. Such budget items may include: evaluators, trainers, consultants, partner subcontracts, and many other external providers of services; they may also include contracts for the rental or lease of facilities or equipment or similar resources.

 

CORPORATE GRANT: A charitable grant awards program funded by a for-profit business or corporation; it may be independent of the corporation and it may have its own endowment. Example: Royal Dutch Shell offers several types of local grants.

 

COST CATEGORIES: The set of primary types of line items presented in a project budget. Common categories for government grants are: personnel, fringe benefits, contractual, travel, supplies, equipment, construction, other, and indirect costs. Categories for foundation grants are typically fewer; they may include as few categories as only personnel and non-personnel.

 

COST SHARING: An applicant’s contribution to the costs of a grant-funded project or initiative beyond any matching that may be required by law or regulation. Also see: Matching Funds.

 

DECLINING FUNDING: An amount of grant funding that decreases from year to year during a multiyear grant period.

 

A later post will cover entries in this Glossary starting with letters D to F.

 

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