On this page:
- Basic Components of a Research Budget
- Two Models of Budget Development
- Other Factors Affecting Your Budget
- Resources that can Help Your with Your Budget
Budgets should provide the sponsor with an accurate assessment of all cost items and cost amounts that are deemed necessary and reasonable to carry out your project. They should be based upon your description or the statement of work. Budget justification provides more in-depth detail and reason for each cost and is often considered by reviewers as a good indicator of the feasibility of the research.
1. Basic Components of a Research Budget
A research budget contains both direct costs and indirect costs (overhead), but the level of detail varies from sponsor to sponsor. The first step in developing your budget is to read carefully the guidelines of a funding opportunity.
There is no magic formula available to develop a budget. Here are basic steps to develop a good budget.
- Define project tasks, timelines and milestones and determine the actual resources and costs required to complete these. Consider whether contingencies are needed (and confirm they are eligible expenses).
- Determine the eligible expense categories and maximum amount allowed by the sponsor. Adjust scope of the project to make sure proposed activities fit within the allowance.
- Categorize these costs (e.g., salaries, supplies, equipment…) per year, in some cases by quarter.
- Ensure that project scope and budget match. Include indirect costs of research as permitted by sponsor and the University policy.
2. Two Models of Budget Development
The examples (see below) developed by the University of British Columbia demonstrate two ways to include indirect costs into your budget.
- “Price” Model. Indirect cost is built into each budget line item.
- “Cost” Model. Indirect cost of research is presented as a separate line item.
Unless the sponsor specifies in writing that they require the indirect costs of research to be presented as a separate line item (Cost Model), the indirect cost should be built into each budget line item (Price Model). Indirect costs are normally included in the price of goods and services worldwide.
For example, you are developing a budget for a funding opportunity with an indirect cost rate of 25%. Your direct costs are $201,000 broken down by expense categories shown in the second column of the table below. The third and fourth colums present the two ways you can include the 25% overhead in your budget using the Price Model or the Cost Model, respectively:
|Line item description||Direct Cost||'Price' model (indirect cost built into each line item)||'Cost' model (indirect cost presented as a separate line item)|
|Salary: Post-Doctoral fellow * 1||$42,000||$52,500||$42,000|
|Salary: PhD student * 2||$43,000||$53,750||$43,000|
|Salary: Master's student * 3||$54,000||$67,500||$54,000|
|Travel and subsistence||$21,000||$26,250||$21,000|
|SFU Indirect Cost (25% of Direct Costs)||N/A||N/A||50,250|
|Total cost (direct and indirect)||$201,000||$251,250||$251,250|
3. Other Factors Affecting Your Budget
In-kind and cash contributions, like other costs to the sponsored project, must be eligible and must be treated in a consistent and uniform manner in proposal preparation and in financial reporting.
Cash contribution is when an actual cash transaction occurs and can be documented in the accounting system. Examples of cash contribution include allocation of compensated faculty and staff time to projects, and the purchasing of equipment by the University or other eligible sponsor for the benefit of the project.
In-kind contributions are both non-monetary or cash equivalent resources that can be given a cash value, such as goods and/or services in support of a research project or a proposal. It is challenging to report on in-kind contribution, please make sure the numbers you use are well supported, consistent and easy to quantitate.
Examples of an in-kind contribution may include:
- Access to unique database or information
- Professional, analytical, and other donated services
- Employee salaries including benefits for time allocated to the project
- Study materials, technologies, or components
- Patents and licenses for use
- Use of facilities (e.g., lab or meeting spaces)
- Partner organization time spent participating in the project
- Eligible infrastructure items
Matching on Sponsored Projects
Some sponsored projects require the University and/or a third party to contribute a portion of the project costs. Such contribution is known as “matching”. Examples include NSERC Collaborative Research and Development Grants, NSERC Idea to Innovation Grants, SSHRC Partnership Grants, CIHR Industry Partnered Collaborative Research Program, and CIHR Proof of Principle Grants.
Matching requirements may be in the form of an actual cash expenditure of funds or may be an “in-kind” match. For example:
- A 1:1 match would require $100 of a third-party matching for every $100 received from an agency.
- A 30% match would mean that of a total budget of $100, the agency would provide $70 and a third party would need to match $30.
4. Resources that can Help You with Your Budget
- Current salary and benefit rates for graduate students and postdocs/research associates
- SFU Business and Travel Expense Policy
- Current rates for services provided by central units or department facilities to be used in the research. For example: