What Is a Budget Narrative?

The What is… Blog Series is designed to serve as an entry point for readers who are new to federal grants, or who might just need a refresher. Click here to read more posts in this series.

A budget narrative provides explanations about line items from the grant applicant’s standard budget. In federal grant applications, a budget narrative is sometimes called a budget justification or a budget detail.

In many cases, grant-making agencies will provide specific instructions about the makeup of the budget narrative. These instructions should be followed as closely as possible.

Sometimes, agencies will even provide templates or examples that can be used by applicant organizations. A Google search for “federal grant budget narrative .gov” will lead you to many other examples and guidance documents.

 

Example from USAID

What follows is an excerpt from a USAID budget narrative template (click here for the full version). This particular section provides detailed explanations about the proposed project’s branding and marketing costs:

8. USAID Branding and Marking Costs ($X)

• There are 2 project sites, each with 1 gate.  A sign will be erected at each gate to acknowledge USAID’s assistance.  Each sign is expected to cost $100 based on previous experience. These costs will be evenly allocated between both objectives.
• There will be 2 USAID-funded project vehicles (1 for each objective).  A large label will be affixed to each vehicle. Each large label is anticipated to cost $50 based on supplier quotes.
• There will be one project office, to which a sign will be affixed.  The sign is expected to cost $100 based on previous experience, and the costs will be evenly allocated between both objectives.
• There are anticipated to be 20 pieces of office equipment, to each of which a small label will be affixed. Each label is expected to cost 50¢ based on supplier quotes.  The costs will be allocated equally between both objectives.
• There will be 1 warehouse, in front of which a sign will be erected.  The sign is expected to cost $100 based on previous experience, and the cost will be allocated equally between both objectives.
• There are expected to be 100 boxes of pharmaceuticals (USAID-funded only), to which a small label will be affixed.  Each label is expected to cost 50¢ based on supplier quotes, and the costs will be allocated to Objective #1 (Health).

 

Additional Resource

To learn more about budget narratives, read our in-depth post, How to Build Credibility with Your Budget Narrative.