Best practices for a project budget in uncertain times 

“Uncertainty” seems to be the recurring theme for nonprofits in 2025. In an informal discussion I held recently with a group of nonprofits across Ohio, I heard the following: 

• “We heard that our governmental funding was completely cut.” 

• “We just received word that our governmental funding was restored.” 

• “We heard from our foundation partners that they will be increasing their payout—but limiting their increased payout to organizations not like ours.” 

• “We hear from our corporate funders that they are uncertain whether they will fund us as they have in the past, or how much funding might be available at all.” 

If you don’t know what to expect from your funding sources, how do you know what you can reasonably expect to do in the next year to serve your community? How do you calculate the correct costs for a project and follow best practices for budgeting if there’s no certainty about sources of income and anticipated expenses? How do you use your project budget to demonstrate credibility with grantmakers?  

Here are three key values you should try to demonstrate as you put together a grant proposal budget in these trying times. (For the basics of creating an income or expense portion of a budget, check out our free Introduction to Project Budgets course.)  

Be honest about challenges in funding your project budget 

Resubmitting the same old program plan and budget in the face of uncertainty is not how to show funders you’re responding to this challenging environment. An honest approach—and a necessary first step—would be to reach out to current and potential funders to discuss your budgeting before you submit a funding request.   

This doesn’t mean going to them with no plan and asking them to give you one; it means being transparent about exactly what federal funding cuts could do to your program. It means preparing them to see a project budget with contingency plans for both income and activities. It also means listening to their suggestions of how to show such changes in your budget. As we never tire of saying, if you’ve met one funder, you’ve met one funder; each one you connect with may have a different view.   

Be realistic with contingency plans in your project budget 

A program budget’s income portion is essentially a guess—however educated—about who may fund your program and for how much. You want to make this guess as realistic as possible, but the current uncertainty around funding makes that difficult. It’s possible that some funding streams will remain stable: The latest Giving USA report showed increased individual giving and continued growth in corporate giving in 2024. These trends may continue. But you should be prepared for variations by funding streams—or the complete disappearance of a potential source of funding. 

How do you show that complex reality in a project budget? Well, you can still list the funding sources most likely to come through. However, it can be a good idea to: a) add more potential funding sources than you’ve needed in the past; and b) explain (using a budget narrative) your logic for including additional funding sources or program changes.   

In essence, you include a small contingency plan in the budget. Contingency planning often happens too late—after a funding source falls through or costs increase unexpectedly. But proactively addressing the potential loss of income shows a funder your organization is realistic, while not defeatist. 

Here’s an example, with a narrative footnote: 

Income source	Amount	Status
Government grant (for technology)	$40,000*	Pending

*Allocation from this funding source is in debate for 2025 [citation]. If this specific source is cut, the shortfall will be made up by a combination of increased foundation funding solicitations and/or service cuts (see below).  

Show flexibility in your project budget’s expenses 

The contingency plan can extend beyond the income section of the budget to the expenses section. Remember, program expenses cost what they cost. You shouldn’t underestimate costs just to make a project budget balance.   

But you can show flexibility when it comes to the program itself. Think about how you might modify the program if an unexpected cut (e.g., that $40,000 in the example above) actually happened. How could the budget reflect this change? 

Here’s an example for one kind of program cost:   

Expense	Notes	Total cost
Tablets for computer skills training	$200 per tablet x 200 students	$40,000*

*As noted in the income section, the government grant funding for these tablets is in debate for 2025. If the grant is not received, we will seek replacement funding through new foundation fundraising. Since tablets are necessary for all participants, we may need to reduce the number of individuals served, depending on the amount of replacement funding received.   

Be honest, be realistic, and show flexibility in your project budget, and funders will recognize those values and continue to support your best efforts. The most important thing about budgets and funding for both funders and nonprofits isn’t all those numbers—it’s the people you serve and the difference you make in the community.