When it comes to grant writing, one of the trickiest parts of putting together a proposal is figuring out the budget. This is where you lay out the financial details of your project, including the organization’s revenue and expenses. A well-crafted budget can make the difference between your proposal being accepted or rejected. But don’t let that stress you out – we’re here to help. In this blog post, we’ll break down the key elements of a budget and give you some helpful tips for creating a comprehensive budget.

Elements of a budget


First things first, let’s talk about the money that’s coming in. This is what we call “revenue” and it includes all of the money that your nonprofit expects to bring in during the budget period. This can include things like donations, grants, and fundraising events. Here are some common examples of revenue sources:

  • Donations: Money that individuals, foundations, and corporations give to the nonprofit. This can include one-time donations, recurring donations, or donations in the form of in-kind gifts (such as goods or services).
  • Grants: Money that is awarded to the nonprofit by foundations, government agencies, or corporations for specific projects or programs.
  • Membership dues: Money that individuals or organizations pay to become members of the nonprofit and support its mission.
  • Fundraising events: Money that is raised through events such as auctions, galas, or charity runs.
  • Sponsorships: Money that is provided by businesses or organizations to support a specific event or program in exchange for recognition or advertising.
  • Investment income: Money earned on investments such as stocks, bonds, and real estate.
  • Program revenues: Money earned by selling products or services related to the nonprofit’s mission.
  • Royalties: Money earned from the use of copyrighted materials, such as books or music.


Now let’s talk about the money going out–or “expenses.” This includes all of the money that the nonprofit expects to spend during the budget period, such as employee salaries, rent, utilities, and program costs. In a nonprofit budget, expenses are typically categorized into several main categories, which can include:

  • Program expenses: These are the direct costs associated with delivering the nonprofit’s programs and services. They can include things like staff salaries, materials, and equipment.
  • Administrative expenses: These are the expenses associated with running the organization, such as rent, utilities, office supplies, and insurance.
  • Fundraising expenses: These are the expenses associated with raising money, such as marketing and event planning.
  • Management and general expenses: These are expenses that are not directly associated with programs or fundraising, but are necessary for the overall operation of the organization, such as audit, legal, and accounting services.
  • Depreciation: Money set aside for the eventual replacement of long-term assets such as equipment and vehicles.
  • Other expenses: Depending on the nonprofit organization, there may be other expenses that are specific to that organization’s mission and activities, such as travel expenses, training expenses, or outside services expenses

Tips to creating a budget

When it comes to developing your budget, it’s important to keep a few things in mind to make sure it’s the best it can be. Here are some tips to keep in mind:

Be realistic: Don’t overestimate income or underestimate expenses, or visa versa. Be honest about the resources you have and the resources you need.

Be specific: Break down your budget into specific categories, such as personnel, equipment, and marketing. This will make it easier for the grant maker to understand and evaluate your proposal.

Be flexible: Keep in mind that your budget may change as the project progresses. Be prepared to adjust your plans and budgets accordingly.

Be transparent: Clearly explain any assumptions or estimates used in the budget, such as projected attendance for an event or the cost of rent for a new facility.

Be comprehensive: Include all relevant budget information, such as in-kind contributions, matching funds, and any other sources of income.


So, now that you have a better understanding of nonprofit budgeting, it’s time to put that knowledge to use and apply for grants! Developing a budget can be a bit intimidating, but remember to keep it realistic, specific, and transparent. And don’t forget, it’s okay if things change as the project progresses, just make sure to adjust your plans and budgets accordingly. Also, make sure to be honest about costs and include a plan for sustainability. And the most important thing, clearly explain how the funds will be used, this way reviewers can see that the funds will be put to good use for a good cause. Happy budgeting!