The budget of a proposed project serves as a blueprint for spending the project’s funds. The proposed budget must give an accurate assessment of all cost items and cost amounts. If the project is funded, the budget will become the financial plan used by the funding agency to provide support.
An effective proposal budget outlines a proposed project in fiscal terms and helps reviewers to determine how the project will be conducted. Budget information about activities planned and personnel who will serve on the project provides reviewers with an in-depth picture of how the project will be structured and managed. Budget details usually reveal whether a proposed project has been carefully planned and may ultimately be feasible.
The budget should be complete; that is, it should include all the costs of any personnel, supplies, and activities required by the project. The project needs to be feasible within the budget presented. If major cost areas are omitted or underestimated, the project, as proposed, will not be considered feasible.
The budget should be reasonable; that is, it should be based upon actual costs when possible. Reviewers are often familiar with costs that are common to many projects, such as computers, special equipment, travel, postage, and telephones. Cost items in the budget do not need to be based upon formal price quotes. Nonetheless, all costs should be based upon available price information.