There’s a lot to consider when you are developing a budget for your research grant application. While the best resources at your disposal are the sponsored research programs office at your institution, your departmental administrative officials, your mentors and your peers, we have compiled some tips and reminders that may be helpful for preparing your budget. For more detailed information, visit our Developing Your Budget webpage . We offer a brief overview below.
Consider the Costs
The cost principles address four tests that NIH follows in determining the allowability of costs. Costs charged to awards must be allowable, allocable, reasonable, necessary, and consistently applied regardless of the source of funds. Information on the applicable cost principles and on allowable and unallowable costs under NIH grants is provided in the NIH Grants Policy Statement under Cost Considerations.
Know Your Limits!
Read the Funding Opportunity Announcement (FOA) carefully for budget criteria. Relevant FOA sections include: II.1 Mechanism of Support, II.2 Funds Available, III.2 Cost Sharing or Matching, and IV.5 Funding Restrictions. Identify all the costs that are necessary and reasonable to complete the work described in your proposal. Request no more and no less!
Distinguish between allowable Direct Costs and allowable Facilities and Administrative Costs
Direct costs are costs that can be identified specifically with an institutional project or research activity.
F&A costs are those that a grant incurs for administrative overhead that are not directly associated with your project. These costs are also known as “indirect costs.”
Total costs include both allowable direct costs and allowable F&A costs. See our budget webpage for more detailed information.
Modular versus Detailed Budgets
The NIH uses two different formats for budget submission depending on the total direct costs requested and the activity code used. To determine which format you should use, see the flowchart and descriptions on our budget webpage.
We do not expect your budget to predict perfectly how you will spend your money five years down the road. However, we do expect a reasonable approximation of what you intend to spend. Reviewers want to see that you understand the scope and breadth of your project.
Links to more resources that will help you formulate your budget are at the bottom of the Developing Your Budget webpage.
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