Quiz — Chapter 12: The Budget Justification
Question 1. State the threshold concept and why it's framed around what a reviewer can "repeat."
Answer
Every line needs a reason a reviewer can repeat — because your advocate (assigned reviewer or program officer) will face budget questions in the panel/board and must defend each line. A justification that arms them with a one-sentence reason lets them defend you; one that doesn't leaves the line to be cut or doubted.Question 2. Why is restating the numbers not a justification?
Answer
Because the reviewer can already read the numbers in the table; description adds nothing. Justification explains *why* each number is what it is (necessity, reasonableness, basis), persuading the reviewer that every dollar is necessary. The budget is the evidence; the justification is the closing argument.Question 3. Define necessary, reasonable, and allocable.
Answer
Necessary: the project genuinely requires it (tied to an activity). Reasonable: the amount is what a prudent person would pay, with a basis of estimate. Allocable: the cost benefits *this* project and is charged in proportion to that benefit. They are the questions a reviewer asks of every line.Question 4. What is a "basis of estimate," and why does it matter?
Answer
How you arrived at a number — a quote, a published rate, a calculation, a comparison. It closes the "where did that come from?" question, turning an assertion into a documented estimate. It also protects you in a later audit. Round numbers with no basis read as guessed and invite cuts.Question 5. How do you justify personnel effort persuasively?
Answer
Translate the percentage into concrete work — not just "0.5 FTE" but the specific tasks that fill it — so the reviewer sees the effort is real and necessary, not padded. For a PI, low effort must be justified by showing the leadership tasks fit the percentage, or the reviewer doubts the leadership is real.Question 6. How should you handle a large or sole-source purchase in the justification?
Answer
Anticipate the "do they really need this / did they shop around?" question: establish necessity (what the project can't do without it), reasonableness (a quote), why buying beats alternatives (rental/sharing/existing), and — for sole-source — a brief justification that only one vendor provides the needed capability.Question 7. How do you justify indirect costs to a skeptical funder, honestly?
Answer
Explain what they are — not waste, but the real infrastructure (space, financial systems, administration) the work requires and that keeps the grant accountable. Frame them as a necessary condition of pursuing the mission responsibly, without defensiveness. Never pretend they don't exist (then your org absorbs them). Know the de minimis option.Question 8. What is the "overhead myth," and how does it help you justify indirect costs?
Answer
The belief that low overhead means a virtuous, efficient organization — which pushes nonprofits into a "starvation cycle" of under-investing in infrastructure and under-performing. The charity-rating leaders themselves repudiated it in 2013. Knowing this lets you justify indirect with confidence: you're not asking the funder to tolerate waste but to avoid a cycle that weakens the organizations they want to succeed.Question 9. Why does a well-justified line resist budget cuts?
Answer
When a panel decides a fundable proposal's budget is high, they cut the lines that look least justified first (easiest to defend cutting). A line whose necessity and basis are clearly established is hard to argue away, so it's protected. Justifying your most important lines most carefully makes them uncuttable.Question 10. Describe the right tone for a budget justification and two tone failures.
Answer
Factual, confident, specific — a competent professional who knows the costs are legitimate. Failures: *defensive* (apologizing/over-explaining, signaling you don't believe the cost is justified) and *vague* (hand-waving instead of specifics, signaling you can't justify it).Question 11. Why does tying the justification to the narrative build trust?
Answer
Cross-references (e.g., an incentive line tied to the narrative's retention strategy) make the budget part of one coherent case rather than a separate document, and show the applicant built the budget *from* the plan. A justification disconnected from the narrative makes the reviewer doubt the same person wrote both, or that the budget reflects the real plan.Question 12. Why is this chapter shorter than the budget chapter, per the text?