Types of Budgets

The budget can be a complicated part of preparing a proposal. It should be done carefully and accurately as it is a direct reflection of the work being proposed and of your knowledge of what is required to accomplish that work.

Most sponsors provide guidelines for budget preparation and many provide forms for the submission of budget information.

For multiple-year proposals, a budget for each year is usually expected, as well as a cumulative budget. Consideration should be made for cost increases and inflation from one year to the next. ORS suggests that unless the PI has access to exact costs for the "out" years of a project, an inflationary factor of 3% be used. If the NIH Modular Grant Application and Award process is applicable, inflationary factors are not used.

Lump Sum Budgets

The phrase “lump sum budget” refers to very general, non-specific approach to budgeting which leaves a great deal of discretion to the owner of the grant. As opposed to a more specific line item budget where the salaries and fringe benefits are broken out by individual, a lump sum budget might group them together into one round figure: $35,000.

Though the lump sum budget might have categories of spending, those might be very generally defined. For instance, there might be $50,000 in a Research Project category. This broad category could include salary, travel and equipment depending on the specific project that is eventually funded.

Typically lump sum budgets are supported by foundations where the financial reporting may not be as rigorous and the use of funds may be much more flexible than would be required on a federal grant.


NIH Modular Budgets

In a modular grant application to the National Institutes of Health, total direct costs up to $250,000 per year are requested in $25,000 increments or "modules" instead of being compiled from detailed and separate budget categories. At time of submission, NIH will accept a modular budget; however, at JIT, Duke must submit a detailed budget and justification. Supplies $1000 or more will require a detailed description within the budget justification.

A typical modular grant application will request the same number of modules in each year. Application budgets are simplified and the budget form pages of the PHS 398 application are not used. Instead, total direct costs requested for each year are presented on a simple modular budget form. A budget justification in narrative form is provided only for personnel and, when applicable, for consortium or contractual costs and major equipment costs.

Note that SPS and grants.duke are designed to prepare both regular and modular budgets in the correct format for NIH. Duke recommends creating a detailed budget in SPS at the time of submission.

Additional narrative budget justification is required if there is a variation in the number of modules requested from year to year. There is no routine escalation for future years. In determining the total for each budget year, applicants should first consider the direct cost of the entire project period. Well-justified modular increments or decrements in the total direct costs for any year of the project that reflect substantial changes in expected future activities may be requested. For example, purchase of major equipment in the first year may justify a higher overall budget in the first, but not in succeeding years.

NIH will request detailed budgets at Just-in-Time along with complete budget justifications. Important information regarding NIH Just-in-Time requests can be found here.



Program Projects Grants (PPG)

Though the term “program project grant” refers to specific funding mechanisms at NIH, it can also be used more generally to describe multi-faceted projects and programs. A PPG will have multiple research projects or programs that are integrated into a common theme but are budgeted for separately. For instance the Title VI Language Resource Centers funded through the Department of Education may have budget components that are supporting the administration of the Center, research, outreach, training and development and fellowships all integrated around a specific geographical region.

Budgets for PPGs get quickly complicated because each individual part contributes to a common research goal and the budgets “roll up” into a single combined or composite budget.


Line Item Budget

Additional Links:

Sample NSF Line Item Budget

A line-item budget is one in which the individual financial statement items are grouped by category. It shows the comparison between the financial data for the past accounting or budgeting periods and estimated figures for the current or a future period.