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Most sponsors require a budget justification or budget narrative to explain and justify the expenses requested in a proposal budget. The budget justification is a critical component of a proposal as it demonstrates the importance and necessity of project costs in meeting the aims of the proposed project. It is the financial parallel to the project narrative. A well-written and thorough justification should follow the sponsor’s guidelines, address the necessity of requested funds in each major cost category, and explain what will be accomplished with the requested funds.


Tips for writing budget justifications

  • Organize the budget justification in the same order and format and using the same budget categories as the sponsor.

  • Check the sponsor’s guidelines for any page limitations, special formatting instructions, specific content requirements, and allowed or disallowed expenses.

  • Develop the budget justification with input from your departmental research administrator (Grants & Contracts Specialist).

  • Numbers in the justification should match those in the budget. For example, if the budget requests $3,255 for travel then the justification should specify the same amount; do not round to $3,250.

  • All costs must be reasonable, allowable, and allocable:

    • Reasonable means that a prudent person would pay the amount requested for cost component.

    • Allowable means that a cost may be charged to the grant or contract.

    • Allocable means that the cost is necessary for the success of the project.


Common mistakes

  • Using an incorrect indirect cost rate. Reference the funding opportunity guidelines to confirm any indirect cost rate limitation. Then confirm the correct university rate with your grants contact. Be sure to use the same rate in the budget and budget justification.

  • Making unnecessary cost sharing commitments.

  • Weak justification of atypical project costs.

  • Providing too much or too little detail. Some sponsors prefer detailed budgets and justifications. Others want a little less information. Familiarize yourself with sponsor-specific preferences. 

  • Using a single justification template for all sponsors.

  • Using a template without ensuring that its content is applicable to your project.

  • Exceeding page limits.


Budget justification template


Carefully review and edit templates to ensure appropriateness for the project at hand. 


Guidance and sample language for unique budgeting scenarios