Developing a Budget

Key guidelines

A sponsored project budget is an estimated financial representation of the scope of work for a project. A proposal budget should demonstrate how the University will carry out the project objectives with the requested amount of resources. The budget should be prepared with great care and should provide a detailed breakdown of each proposed cost category. Budgets should be prepared for the entire project period (i.e., for all years of the sponsored project) and should provide a breakdown of costs for each budget period year.


Proposal budgets are generally grouped into three primary categories:

  • Direct costs are those that can be specifically identified with a particular project. These costs include salaries and wages, fringe benefits, travel, equipment, supplies, consultant services, subcontracts, and other direct costs. Click below for more on various type of direct costs. Salaries, wages, and fringe benefits.
  • Equipment, Materials and Supplies, and Travel.
  • Consultants and Subcontractors.
  • Other Direct Costs.
  • Indirect costs (now called Facilities & Administration or F&A) are institution-wide costs that cannot be tied specifically to a project, such as utilities, maintenance and depreciation of facilities, and general administrative costs.
    • When preparing your budget, all direct cost items are listed first; then the appropriate indirect cost percentage rate is assessed against the total of allowable direct costs.
    • Click here for more on indirect costs.
  • Cost Sharing is defined in federal regulations as project costs not borne by the sponsor. The University shares in the cost of a sponsored program whenever there is a difference between the total cost of performing a project and the funding provided by the sponsor. Either direct costs or indirect/F&A costs may be cost shared.
  • Click here for more on cost sharing.


Budget Template

NSF 5-year budget template