Budget Trust Signals

Your budget is more than numbers—it’s a credibility test. Funders use budgets to assess whether you understand costs, can manage funds responsibly, and have the capacity to deliver. Small details can make or break that trust.

Trust Signals That Matter

1. Realistic Salary Calculations

Good: “Program Director (0.5 FTE): $35,000 (50% of $70,000 annual salary)“
Bad: “Program Director: $35,000” (no explanation)

Show your math. If you’re requesting partial FTE, explain the calculation. This signals you understand actual costs.

2. Appropriate Indirect Costs

Good: “Indirect costs at 15% of direct costs (consistent with organizational policy)“
Bad: “Indirect costs: $50,000” (no basis shown)

Explain your indirect rate and how it was calculated. If you’re not requesting indirect, explain why.

3. Line Items That Match Your Narrative

Good: Budget includes specific items mentioned in the program description.
Bad: Budget includes line items not mentioned anywhere in the narrative.

Every significant budget line should be referenced in your narrative. This shows alignment and planning.

4. Reasonable Cost Per Participant/Unit

Good: “Training costs: $500 per participant (includes materials, venue, and facilitator fees)“
Bad: “Training costs: $50,000” (no unit cost shown)

Break down costs to show reasonableness. If you’re serving 100 people at $500 each, that’s $50,000—but showing the unit cost builds trust.

5. Match Documentation

Good: “In-kind match: $25,000 (staff time at $50/hour × 500 hours)“
Bad: “In-kind match: $25,000” (no documentation)

Show how you calculated in-kind match. Provide basis for valuations.

6. Contingency (When Appropriate)

Good: “5% contingency for unexpected costs ($2,500)“
Bad: “Contingency: $10,000” (20% of budget, no explanation)

Small contingencies (3-5%) show planning. Large contingencies without explanation signal uncertainty.

7. Timeline Alignment

Good: Budget shows costs distributed across project timeline.
Bad: All costs in Year 1, but project spans 3 years.

Show how costs align with activities. This demonstrates project management understanding.

Red Flags to Avoid

• Round numbers everywhere (suggests guessing)
• Missing line items (travel, supplies, etc.)
• Unrealistic cost per unit
• No explanation for significant line items
• Budget doesn’t match narrative scope

The Bottom Line

Budgets are credibility tests. Small details—showing your math, explaining calculations, aligning with narrative—signal that you understand costs, can manage funds, and have the capacity to deliver. Get these right, and funders trust you with their money.