How to prepare the detailed budget of the project

[1] The simplified project budget preparation model is used by humanitarian funds administered by the United Nations Office for the Coordination of Humanitarian Affairs (OCHA)

Preparing one activity budget

Donors emphasize the importance of including details of all items over US $ 3,000 at the time of submitting the budget, but may also request details of items under US $ 3,000. 

The following table provides details of one 4-day training activity for 12 trainees.

Budget model for one training activity 

Another example of a budget of designing and printing awareness materials that contain several detailed activities.

Allowed costs

In addition to the budget items mentioned above in the budget components, there are allowed costs by most donors as follows:
1. Indirect Costs: it is customary of donors especially in Europe and America that the organization can add an item in the budget with no more than 7% of the agreed project budget. This item is added in the end of the budget before the final total. Some organizations put 7% and some put less if not needed. This item is one of the traditions that donors and organizations are accustomed to, which is important as it helps in the sustainability and it covers the costs the organization needs that are not included in the project budget. The organization doesn’t require the donor’s permission to spend this amount and usually doesn’t need to tell the donor for what it is spent.

2. Contingency Costs: many donors agree to add the item of contingency costs in the budget with no more than 5% of the total agreed budget. However, this amount cannot be spent unless suitable justifications were provided to the donor during project implementation and the donor’s consent was obtained.

Non-allowed costs

Not all of what comes to mind can be funded; therefore, most invitations to submit proposals clarify things that cannot be funded by the donor. The following are some costs that donors refuse to fund, which are taken from European Union standards:

• Pay debts of the organization or debts' interest.
• Provisions for potential future losses or liabilities.
• Any costs for beneficiaries that are funded by another work or program.
• Buy lands or buildings, except where necessary for the direct implementation of work. This exception is very rare.
• Losses arising from exchange differences.
• Credit to third parties.
• Salaries for government employees