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The vocabulary of budget development is part of the language required for writing a winning grant proposal. This set of entries covers words and phrases from I to N (see table). Revised and expanded in early 2018, its context is the United States of America.


Indirect Costs (IDC) Leveraging
Invitational Priority Market Value
Lead Agent (Applicant) Matching Funds
Lead Agent (Grant Maker) Matching Grant
Letter of Commitment Materials
Letter of Inquiry Multiyear Budget
Letter of Intent (LOI) Non-Competitive Grant
Letter of Support Novice Applicant
Level Funding


INDIRECT COSTS (IDC): A cost category for costs that are not readily allocable to or identifiable with operating a specific grant program; it is also often called Overhead. Indirect costs equal direct costs multiplied by the approved indirect cost rate (IDC = DC x rate). Such costs commonly relate to administration and facilities. Generally, a government agency, as a grant maker, reimburses indirect costs only after it has negotiated and approved an indirect cost rate with the grant recipient. As grant makers, foundations are less apt than units of government to allow full or partial recovery of an organization’s indirect costs. Also see: Direct Costs and Indirect Cost Rate.


INVITATIONAL PRIORITY: An area of special focus that a grant maker would prefer to see an applicant address in its proposal, but which does not affect the review, rating, or rank ordering of proposals.


LEAD AGENCY (Applicant): The organization that submits a proposal on behalf of a partnership of two or more organizations and that serves as the grant recipient. If funded, the lead agency is legally responsible for implementing and administering its funded project, for properly managing all grant funds, and for submitting all required reports. Also see: Fiscal Agent.


LEAD AGENCY (Grant Maker): Particularly in federal grant making, the agency or program office with the primary responsibility for approving or funding a project. It reviews the proposals, coordinates with other involved agencies, and notifies the applicant of its funding outcome.


LETTER OF COMMITMENT: A brief official letter that conveys the willingness of a partner organization to commit cash or other resources to a proposed project; it specifies the terms and conditions of the commitment, the precise resources to be offered or delivered, and the actual or estimated values of those resources. Also see: Letter of Support.


LETTER OF INQUIRY (LOI): A brief, but formal, mode of grant application, typically one to five pages long, often used when an applicant seeks a grant from a foundation; it commonly includes: an introduction; a problem statement; objectives and activities; an evaluation plan; an organizational capacity statement; and a budget. The letter of inquiry often forms a basis for deciding whether the foundation will request a full proposal from an applicant. Informally, also known as an LOI.


LETTER OF INTENT: A brief official letter or email (or other specified form of notification) from a potential applicant to a grant maker that conveys its intention to apply for funding. The grant maker may request or require the letter of intent in order to gauge the number of applicants likely to be competing for funding in a given grant program. Alternatively, some grant makers may use the term as a synonym for Letter of Inquiry.


LETTER OF SUPPORT: A brief official letter that conveys the enthusiasm, endorsement, and encouragement of an individual or an organization for an applicant’s proposed grant project or initiative and for its request for funding, but does not explicitly commit resources to it. Also see: Letter of Commitment.


LEVEL FUNDING: An amount of grant funding that does not change from year to year during a multiyear grant period.


LEVERAGING: A measure of the potential role that a given grant award is likely to have in attracting other funding or resources to a proposed project or initiative. As the specific grant maker requires, an applicant may present either a ratio of requested grant funds to total project funds or a ratio of requested grant funds to funds from other sources.


MARKET VALUE: The economic value of a resource (e.g., volunteer labor at minimum wage) as determined up to the date and time an applicant submits a proposal (e.g., the wage rate in effect on or before that date); often, an applicant determines market value by checking an official government publication or website or by reviewing a grant program’s regulations.


MATCHING FUNDS: The share of the total costs of a project or initiative, as required by law or regulation, which comes from any source other than the specific grant being sought; the matching funds may consist of the fair market value of donated resources (in-kind contributions) or of actual cash to be spent (cash) or of both. See the table for examples when an applicant is requesting a $200,000 grant award. Also see: Cost Sharing.


Calculating Matching Funds
Match Required Grant Maker Share Local Share Total Budget
50% Match = 1:1 $200,000 grant $200,000 local     $400,000
33% Match = 2:1 $200,000 grant $100,000 local     $300,000
25% Match = 3:1 $200,000 grant $66,700 local     $266,700
20% Match = 4:1 $200,000 grant $50,000 local     $250,000
10% Match = 9:1 $200,000 grant $22,500 local     $222,500


MATCHING GRANT: A grant awarded to an applicant with the intention of matching some of the funds (i.e., as a partial match) or all of the funds (i.e., as a total match) awarded to an applicant by another source. Also see: Challenge Grant.


MATERIALS: A cost category for consumable resources such as media (e.g., books, workbooks, digital videodisks, or software), references, and training products. The category is often conjoined with Supplies or it is subsumed as a part of Supplies. Also see: Supplies.


MULTIYEAR BUDGET: A budget covering all or part of two or more consecutive fiscal or calendar years. Many grant makers require a budget for an entire multiyear project period at the time of the original application for a grant.


NON-COMPETITIVE GRANT: A funding program from which applicants are eligible for a grant award if they complete and submit required materials by a given deadline. Also may be called: a Budget Earmark, an Allocation Grant, an Entitlement Grant, a Formula Grant, or a Mandatory Grant.


NOVICE APPLICANT: An individual or an organization that has not obtained a discretionary grant directly from a specified unit or level of government (e.g., a federal agency) or from a specified grant program within a defined time-span (e.g., the last five fiscal years).


A later post will cover Dictionary entries starting with letters O to R.









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