Even when you have demonstrated the who, what, when, where, and how of your budget, additional explanation may be necessary. That brings us to the budget narrative.

Occasionally, a funder will request a budget narrative. This entails a brief paragraph of how the expenses relate to the project, explaining in particular the major expenses. Budget narratives are especially important when you’re asked for budgets covering more than one year. Multiyear budgets will inevitably have variations from year to year. The narrative gives you the opportunity to explain them.

Even if you’re not asked for a budget narrative, you might want to include footnotes at the bottom of the budget page to explain major costs and point out ties to the program narrative. Remember: in the budget, you want to answer any questions the funder might have before she asks them.

Take a quick look at the program budget in Chapter 21. Scan the Program Expenses to see if anything stands out to you in Year 2. Your eye probably went right to the $40,000 for exhibition expenses. That one line is 84 percent of the program expenses, yet it’s not broken down. This is what I call a “big sore thumb,” because it calls attention to itself.

That $40,000 consists of a number of expenses, including building materials, painting, sign silk screening, lighting, and labor. You could add all those categories to your budget, or itemize the larger ones in a budget note.