What is a budget narrative?

A budget narrative is a critical component of grant proposals, providing a detailed explanation of the proposed budget items and outlining their relevance to the overall project. It offers funders insight into how each line item in the budget aligns with project objectives and expected outcomes. The narrative clarifies the rationale behind the budget requests, allowing for transparency and facilitating a better understanding of how funds will be spent.

While other options describe different aspects of grant management or project planning, they do not capture the essence of what a budget narrative actually entails. A concise summary of project objectives focuses on goals rather than financial allocations. An outline of grant management processes relates to administrative procedures rather than specific budget items. A visual presentation of budget allocations may help with understanding the budget layout but lacks the detailed context needed for each item, which is the primary purpose of a budget narrative.