A well-constructed grant budget does more than show how you'll spend the money — it demonstrates organisational credibility, shows that you've thought through the work, and gives funders confidence that the project can be delivered as proposed. A weak or inconsistent budget, by contrast, raises doubts that can sink an otherwise strong application.
Realism: Costs should be plausible for the activities proposed. Significantly under-budgeted items suggest the applicant hasn't thought through the real costs; significantly over-budgeted items suggest padding.
Completeness: The budget should cover all the costs required to deliver the project. Missing cost categories — forgotten insurance, absent volunteer costs, no mention of overhead — suggest incomplete planning.
Consistency with the narrative: The budget should be consistent with the project description. If the narrative says the project will deliver 200 workshops, the budget should include the costs of 200 workshops.
Clarity: The budget should be easy to read and understand. Clear categories, logical organisation, and explanatory notes help programme officers understand and assess the budget quickly.
Most grant budgets are organised by cost category. A typical structure:
Personnel costs
- Salaries (name and position, or position only)
- Oncosts / employer contributions (KiwiSaver, ACC levy, payroll tax in Australia)
- Contractor or consultant fees
Direct programme costs
- Materials and supplies
- Venue and facility costs
- Participant costs (transport, childcare, food if part of programme)
- Equipment (specify items)
Travel and communication
- Staff travel (specify basis — mileage rate or actual costs)
- Participant travel
- Phone and internet directly attributable to the project
Overhead / indirect costs
- Rent or facility costs (proportion attributable to the project)
- Utilities
- Insurance (proportion attributable)
- Administration support
Other costs
- Evaluation
- Reporting costs
- Any other project-specific costs
Personnel costs are typically the largest budget item and warrant careful construction.
Salary calculations
Show your working for salary costs:
Project Coordinator (0.6 FTE × $65,000 base salary × 12 months) = $39,000
Including the FTE proportion and the base salary makes the calculation transparent and checkable.
Oncosts
Oncosts — employer contributions beyond salary — typically add 10-18% to salary costs in New Zealand, depending on the organisation's KiwiSaver contribution rate, ACC levy, and any other employer contributions. Budget notes should explain the oncost rate used.
Contractor rates
If using contractors rather than employees, specify the daily or hourly rate and the number of days or hours expected. Be realistic: experienced contractors in specialist fields cost more than junior staff.
Overhead — the cost of running the organisation that supports the project — is legitimate and should be included in grant budgets. The question is what rate to apply.
Methods for overhead calculation
Many funders cap overhead at 10-15% of direct costs. If your actual overhead exceeds the cap, the organisation must cross-subsidise the grant from other income.
Be honest about overhead
Some applicants artificially deflate overhead to make their budget look "lean". This is counterproductive: understated overhead means the organisation subsidises the grant, reducing overall sustainability. Honest overhead presentation — with an explanation of what's included — is more credible.
Many grants fund only a portion of a project's total cost. Your budget should show:
Showing that you've secured co-funding — or have a credible plan to do so — demonstrates project viability and organisational fundraising capacity.
Budget notes explain the assumptions behind each line and are often as important as the numbers themselves. Good budget notes:
Example:
Venue hire ($3,600): Based on quotes from three community venues. We will use Mangere Community Centre ($150/session × 24 sessions) and Otara Community Hall ($100/session × 6 sessions) for culturally appropriate venues accessible to our target community.
Not matching the project description: If the narrative says 10 workshops but the budget covers 8, the inconsistency raises questions.
Forgetting GST: In New Zealand, consider whether costs are GST-inclusive or exclusive, depending on whether your organisation is GST-registered. Funders need to know whether your budget figures include GST.
Ignoring in-kind contributions: If volunteers, donated materials, or other in-kind resources contribute to the project, showing these in the budget (as both cost and in-kind contribution) demonstrates the full investment in the project.
Rounding without explanation: Heavily rounded figures ($10,000 for training with no explanation) look unresearched. Either provide a breakdown or explain the basis for the estimate.
Tahua's grants management platform includes budget templates and financial management tools that help organisations build compelling grant budgets, track expenditure against approved budgets, and report accurately to funders.