Project Budget

Intro

Creating a Sustainable Budget

Preparing a budget is a crucial part of the project application process. The budget must give the funder a clear understanding of how the funds will be used to achieve the project’s goals. A well-thought-out budget shows the funder that your organisation is responsible, realistic, and has a solid plan for using resources efficiently.

Many people experience an “aha moment” when, after working with the project’s goals and activities, they begin calculating the actual costs. This often means going back to revise the plan.

The first thing you should do when creating a budget is to check what requirements the call for proposals has regarding the budget – these vary widely. You usually find this information in the announcement text or on the funder’s website. Examples of differences between funding calls:

• Some have their own budget forms or templates you must use; others let you structure the budget yourself.

• Some require co-funding or own contributions; others cover 100% of project costs.

• Allowed cost types differ.

• Maximum grant amounts differ.

• Required level of detail varies.

Read the call carefully and find out what is and is not supported. If anything is unclear, call or email the funder.

Overhead / Indirect Costs

Overhead (administrative/indirect costs) is something everyone creating a project budget should understand. Overhead covers fixed organisational costs that support the project, but are not directly tied to a specific activity. Example: If the Saami Council hires a project worker in Karasjok who uses the existing office, costs like rent, electricity, and internet are organisational costs shared by many. These can be covered through overhead.

How overhead is calculated varies:

• Some funders do not allow overhead at all.

• Others use a fixed percentage.

• Some calculate the percentage based on staff costs; others on total project costs.

Example: Interreg allows 15% overhead on staff costs. This fixed sum does not need to be itemised, but it also means rent, internet, etc., cannot be added elsewhere – you must ensure these expenses fit within the 15%.

If overhead is not allowed, administrative expenses can often be included under “other costs.”

Structuring the Budget

Start With the Total Frame

You need to know roughly how large the budget should be. Check whether the funder has defined a maximum amount. If not, previous funded projects can give clues.

Example: If most funded projects are around 5 million, applying for 50,000 means you have misunderstood the scope.

Check Co-funding Requirements

You must determine:

• Is your own contribution required?

• Can the whole amount be covered by one funder?

This greatly affects what you can achieve. If 40% co-funding is required, applying for 1 million vs 500,000 makes a big difference. Co-funding is often challenging in Sápmi, but not impossible – you just need to be aware of it early. Some funders allow in-kind work hours as co-funding

Example: The Barents Secretariat covers up to 70% of costs. The remaining 30% can be co-funded through other sources or own contribution. They accept in-kind labour at a fixed rate of 200 NOK/hour, which can be a helpful solution.

Balancing Income and Expenses

Once you understand the income side, you begin calculating expenses. Remember: A project budget must break even – no surplus or deficit.

If the Project Has Multiple Partners

You must agree on how to divide the budget. Usually, the lead partner receives a larger share to cover coordination tasks.

Calculating Resources for Planned Activities

Go through every planned activity and identify costs:

Salaries

• Will one or several people be employed?

• For how long?

• What is the monthly salary?

Remember to include:

• Social fees.

• Employer taxes.

• Insurance.

• Pension.

• Holiday pay. These vary by country.

Tip: Don’t underestimate the amount of staff time needed. Many projects significantly under-budget labour, which leads to unrealistic workloads or the need to cover salary gaps from other sources.

Activity Costs

Example: You plan to hold a course. You must calculate:

• Number of participants.

• Travel.

• Food.

• Venue rental.

• Accommodation.

• Interpretation (if needed).

• Instructor fees.

Continue this for every planned activity. You don’t need exact amounts, but you should check approximate costs – guesswork creates problems later. Some calls require price quotes.

A well-researched cost estimate makes implementation easier later.

Include a Buffer

It is wise to include funds for unforeseen expenses.
The Nordic Council of Ministers, for example, requires 6–10% of total costs to be set aside for contingencies.

If overhead is allowed, this helps cover unexpected costs; if not, use an “other costs” or “administrative costs” budget line.

Your budget should strengthen your organisation’s capacity, not drain it.

Expenses Before Project Start

Costs incurred before the formal start date are usually not eligible.

Example: If your project involves duodji courses starting in November, you cannot buy materials (e.g., hides) in August, even if that’s when they’re available. Timing matters.

When the Budget Exceeds the Funding Frame

Once all costs are added, many discover:

“This would cost much more than we can get funding for.”

Then comes the “kill your darlings” phase:

• Return to the essentials.

• Cut or scale down activities.

• Ask: What is absolutely necessary?

• Do you really need that study trip to Hawaii?

• Can a week-long course be reduced to two days?

Level of Detail

The budget must be clear but not overly detailed.

• Too much detail = less flexibility during implementation.

• Too little detail = unclear to the funder.

Many funders require reporting against the approved budget lines. If you have extremely detailed lines (room rental / coffee / travel / food / accommodation, etc.), you cannot adjust easily later.

You should avoid large, vague budget categories as well.

Good practice:
Create two versions:

• Internal detailed budget with all calculations.

• Simplified external budget using the same totals, combining some lines.

This version goes into the application.

Summary

• Be realistic – funders quickly spot budgets that are poorly constructed or unrealistic.

• Ensure the project description matches the budget.

• Show how costs were calculated (without overwhelming detail).

• Be honest about the real cost – but don’t overshoot so much that the funder rejects the idea as too expensive.