The budget consists of two parts—the line item budget and the budget narrative. The proposal must demonstrate a clear and strong relationship between the stated objectives, project activities, and budget. The RFP or RFA will describe allowable cost categories for the program budget.
The line item budget describes the specific categories of program funding (including matching funds, if applicable), expenses, and their amounts. It also requires both public and non-public sources to be delineated.
You will need to complete Standard Form 424A-Budget Information (available at http://www.grants.gov/agencies/aapproved_standard_forms.jsp). This is the standard, two-page Federal budget form for non-construction projects. Its purpose is to summarize and describe the requested financial assistance. Other forms may be required by the agency and by government-wide rules.
The Office of Management and Budget (OMB) Circular A-122 addresses issues of costs and budgeting for Federal grants to nonprofit organizations, and is available at http://www.whitehouse.gov/omb/circulars_a122_2004/. Understanding the cost principles and allowable costs for grant programs is critical to creating a budget that can be approved. Just be sure the requested budget amount is within the allowable range of the grant amounts described in the RFP.