A grant budget tells the funder what the project costs and shows that your plan is realistic; the budget justification explains each number in words. When both come from the same spreadsheet, they cannot disagree. Here is how to build that spreadsheet in Excel, treat indirect costs and reuse the file for reporting after the award.
Set up the workbook before you type a number
Use the same structure for every funder:
- Settings: organization, project, funder, grant start and end dates, currency, the funder's maximum request (only if it publishes one), your fringe rate and the indirect cost method.
- Budget: one row per cost.
- Summary: totals by category, calculated with SUMIF, never typed.
- Justification: one draft sentence per line, built from the Budget tab.
- Budget vs Actual: for the reports after the award.
When the funder publishes a budget form, use its category names and order. Otherwise a common set is personnel, fringe benefits, contractors and consultants, travel, equipment, supplies and materials, rent and utilities, participant support, evaluation, printing and communications, other, and indirect costs.
Build every line as quantity x unit cost
A credible line has a calculation and a source: "hours on the project x hourly rate from payroll", not a round number.
| Column | What goes in it | Example formula (row 6) |
|---|---|---|
| Unit, quantity, unit cost | From payroll, a quote, a price list or last year's actuals | Typed |
| Line total | Quantity x unit cost | =IF(OR(E6="",F6=""),"",E6*F6) |
| % requested | Share of the line asked of this funder; blank means 100% | Typed |
| Requested | Line total x share | =IF(G6="","",G6*IF(H6="",1,H6)) |
| Other sources | The rest, with the source's name and status | =IF(G6="","",G6-I6) |
| Basis of estimate | Where the figure comes from | Typed |
For a salary, enter only the time spent on this project (months x share of time, at the monthly salary). Use "% requested" only when another source pays part of that project cost. Enter fringe benefits either as a rate applied to salaries or as separate lines, never both.
For US federal awards, the Uniform Guidance (2 CFR 200.1) treats tangible personal property with a useful life of more than one year and a per-unit cost of $10,000 or more as equipment, or a lower amount if your own capitalization policy sets one. Foundations may define it differently, so state your policy in the justification.
Write the justification from the same rows
The justification answers three questions for each line: what it is, how you calculated it and why the project needs it. A concatenation formula can draft the first two for you, for example =C6&": "&E6&" "&D6&" x "&TEXT(F6,"#,##0")&", basis: "&N6. You add the third, linking the cost to an activity or objective in your narrative.
Never retype an amount in Word; copy it from the workbook. A reviewer should be able to rebuild your total from the justification alone.
Indirect costs: follow each funder's rule
Indirect costs (overhead) cover shared costs such as bookkeeping, management, insurance and part of the rent.
- Foundations: there is no single rate. Some publish a policy. The MacArthur Foundation, for example, adds indirect cost recovery of 29% of project costs on project grants to nonprofit organizations, under a policy most recently updated on October 3, 2024; it does not apply to general operating support and other listed grant types. Read each funder's guidelines and ask when they are silent.
- US federal awards: an organization without a negotiated rate may elect a de minimis rate of up to 15% of modified total direct costs (2 CFR 200.414(f)). Under 2 CFR 200.1, that base includes salaries and wages, fringe benefits, materials and supplies, services, travel and up to the first $50,000 of each subaward. It excludes items such as equipment, rental costs, participant support costs and the part of each subaward above $50,000.
In Excel, add an "In indirect base?" column (Yes or No) and calculate the base with SUMIF on "Yes". Split a large subaward into two lines: the first $50,000 (Yes) and the rest (No). Enter a rate only if you can document it.
Show other sources and match honestly
List every other source with its status: secured, pending, in-kind or planned. Value in-kind gifts (donated space, professional time) at a fair value you can explain, and keep the evidence. If the funder requires a match, add a check that compares other sources with the required share.
After the award: budget vs actual
- Pull the approved amount for each line from the Budget tab.
- Enter actual spending from your accounting records, never estimates.
- Calculate Remaining (approved minus actual) and % spent (actual divided by approved), and add a conditional format that turns % spent red above 100%.
- Explain every line above the variance threshold in your grant agreement.
Many grant agreements require the funder's prior approval before you move money between lines. Read yours before you overspend a line, and ask early.
Our Grant Budget & Justification Kit's Essentials_BudgetJustification_Budget_TRACKER.xlsx links these five tabs, with no amounts pre-filled.
General information: this guide is general information, not legal, tax or fundraising advice. No template can guarantee funding. Always follow each funder's own guidelines and grant agreement.
The Funder File is not affiliated with, endorsed by or connected to the MacArthur Foundation or any US government agency.
Sources
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