How to write a conservation budget: 6 decisions funders check

A program officer reads your narrative closely. Then they read your budget with a calculator, checking one document against the other.

That second reading is where proposals come apart. You can write a persuasive case for the work and still lose the award on a budget that looks approximate. The budget carries numbers a funder can test, against their own experience and against everything the narrative said the project would do, which makes it the part of the proposal that shows whether the plan is work or a wish.

Here are the six budget decisions that carry the most weight.

1. Build from activities

Strong budgets start from the activities in the workplan and cost each one out. Activity-based costing means every line traces to something the project has said it will do.

If the plan calls for six community consultations, the budget shows six. Each one carries the travel, per diem and facilitation it needs. A funder reading that budget can see the project happening.

Professionals call this cross-walking the budget with the narrative, and it runs both ways. Every line in the budget answers to something the narrative promised. Nothing gets described in the narrative without a cost behind it. A reviewer moving between the two documents should be able to land on any line and find the activity it pays for.

The order of the work matters for a practical reason. Cost by category first, in a list of salaries and travel and equipment, and you will find the gaps late. Usually when a funder asks what a line covers and the answer is a guess.

This is the method Building and Managing Conservation Budgets course is built around.

2. Know what counts as an indirect cost

Direct costs attach to the project. On a conservation project, direct costs might include field staff time, vehicle fuel, sample analysis and community workshop planning.

Indirect costs keep the organization running so the project can happen. These are things like rent, utilities, accounting, insurance, human resources or the finance officer who processes your grant reports. They support projects and activities across the organization, so their full cost can’t be assigned to any one project, but every project depends on them.

The distinction sounds administrative, but it moves money. Funders often cap what they will pay toward indirect costs, so anything you classify as indirect falls under that cap. A cost that can legitimately be tied to a specific project can be charged directly instead, and the organization recovers more of what the work costs.

Some costs sit firmly on one side of the overhead line. A field coordinator, and most programmatic staff, will almost always charge time directly to the project. Other costs are found on both sides, and rent is the one most organizations meet first. Rent can be allocated based on hours worked for a particular project, or captured within an indirect cost rate.

Take a technical coordinator whose salary splits evenly between two projects. The rent associated with that coordinator can follow the same split and be charged directly to both. Or the organization can determine to capture all rent costs within its indirect cost rate. Both treatments are defensible. What decides the outcome is which one the organization has chosen and whether it applies that choice the same way every time.

That choice compounds. An organization that never maps its project-level indirect costs against its own cost structure leaves money behind award after award.

"A strong proposal with a strong activity-based budget can still under-recover with an unsupported indirect-cost valuation," said Jonathan Mahlie-Scheller, senior finance manager at Conservation International. "Aligning project indirect costs to your organizational indirect cost structure is vital for the financial health of the organization."

On U.S. federal awards, organizations without a current federally negotiated rate may elect a de minimis rate of up to 15% of modified total direct costs (MTDCs) under 2 CFR 200.414(f). MTDCs are the project’s direct costs minus certain expenses federal rules exclude from the calculation. The 2024 revisions to the Uniform Guidance raised that ceiling from 10% to 15%, for awards beginning on or after Oct. 1, 2024. Once an organization elects the de minimis rate, it must use it consistently across its federal awards.

What that looks like in numbers

Rent sits on both sides of the line conceptually. For the arithmetic, a role shows the stakes more plainly, so take a grants and contracts manager.

A hypothetical three-year restoration project carries $400,000 in direct costs, with no negotiated rate, so the 15% de minimis rate applies. Treat the grants and contracts manager as indirect and the $60,000 salary sits in the organization's indirect pool alongside accounting and human resources, recovered only through the rate. Treat the position as direct, with timesheets showing the compliance and reporting work done on this award, and the $60,000 is charged to the award. That also raises the MTDC base from $400,000 to $460,000. At 15%, the larger base returns an additional $9,000.

Same project. Same person. One classification decision, defensible either way depending on what the timesheets show and on how the organization treats that position across its full portfolio.

Rent moves through this differently. Federal rules leave rental costs out of the MTDC base, so an allocated share of rent charged directly comes back on its own terms and the base stays where it was. The choice still changes what the organization recovers. The route the money takes is different.

3. Show the rationale behind every allocation

Shared costs are where budgets get vague. One vehicle serves three projects. A program manager splits time across a portfolio. A field office hosts two grants.

Write down the basis for each split and put it in the budget notes. Vehicle costs allocated by logged kilometers. Staff time by timesheet percentage. Office costs by headcount. There may be more than one reasonable way to make a split. What matters is choosing a defensible basis and stating it clearly. 

That protects two relationships at once. A funder sees a number they can follow. A partner organization sees a split that was reasoned rather than arbitrary.

4. Build contingency before you need it

Conservation budgets meet weather, permits, currency movement and fuel prices. A budget with no room absorbs the first surprise by cutting activities.

Name the contingency as a line. Size it against the risks you have already identified, and say what it covers. Funders read an explicit contingency as evidence the team has thought about what could go wrong. A budget with no slack suggests it hasn’t been stress-tested.

What happens after the first surprise lands is its own skill, and the subject of Managing Conservation Projects through Uncertainty.

5. Make the multi-year picture hold

Multi-year budgets fail in year two. Salaries rise. A vehicle bought in year one needs servicing in year three. Costs held flat across four years are almost always wrong.

Escalate costs you know will escalate. Phase capital purchases against the workplan instead of loading them into year one. Show the year-by-year shape, because a funder committing to four years wants to see you have pictured all four.

"The projects that succeed over the long term usually start with budgets that are realistic about what it takes to deliver the work," said Jos Williams, vice president of finance and operations, global programs, at Conservation International.

6. Match the budget to the case you are making

The budget travels with a narrative and funders compare the two. A concept note describing intensive community engagement, attached to a budget with almost no travel or facilitation cost, tells a program officer the two documents were written by people who never spoke.

"The strongest proposals are the ones where the narrative, workplan and budget all tell the same story. When those pieces align, funders have confidence the organization can deliver," Williams said.

The cross-walk runs the other way too. A budget line a reviewer cannot trace back to a promise in the narrative raises the same question from the opposite direction, and someone will ask what it pays for.

Read the narrative and the budget side by side before you submit, one promise at a time. Anything committed to in prose needs a line that pays for it.

Costing the work and making the case for it are one job at most small organizations, which is why the same person usually does both. Fundraising for Conservation Organizations takes the full cycle from donor research through stewardship, across individual, foundation, corporate and government funders, using logframes and theory of change approaches to design projects that can be funded. The hands-on project is a concept note ready for a live donor.

Where conservation professionals build these skills

Two self-paced courses from the Academy cover this ground and each one stands alone. Both are $125, five hours, online and self-paced, with a certificate and badge. Conservation International practitioners built both with the Academy, so the methods come from people managing donor-funded budgets now.

Building and Managing Conservation Budgets covers decisions one through five. You build a line-item budget grounded in activity-based costing, allocate costs with a rationale your partners can see, then plan for risk before it lands. The course closes with a capstone: a complete budget for a sample conservation project you can adapt to your own.

Fundraising for Conservation Organizations covers the sixth. Seven lessons take you from donor research to stewardship and teach you to make a plain-language case for your work.

Both stack toward the Designing and Managing Conservation Projects Certificate, four courses and 20 hours for $400. The certificate moves in the order a project moves: design it well, cost it honestly, keep it on track when reality diverges from the plan, then fund it. Taken separately the four courses come to $500, so the certificate saves $100 and adds the credential.

For the funding mechanisms themselves, carbon markets, biodiversity credits and payment for ecosystem services, see Conservation and Nature Finance, which runs 15 hours at $399. For the career picture, ASU CareerCatalyst has a fuller piece on how to break into conservation finance.

Who teaches these courses

The finance leadership behind both courses comes from Conservation International, which manages donor-funded conservation programs across dozens of countries.

Jonathan Mahlie-Scheller is a senior finance manager at Conservation International where he performs financial operations including budget management, analysis and reporting, and compliance. The distinctions in this article are the ones he applies to live budgets.

Jos Williams is vice president of finance and operations, global programs, at Conservation International, where the portfolio spans grant compliance, financial planning and operational systems across a multi-country program structure.

Both teach the budgeting and fundraising courses. The full certificate adds Kavita Chambery, vice president for conservation delivery, Jessica Leas, vice president for design and Whitney Yadao-Evans, delivery director, all of Conservation International.

The Academy is the professional learning arm of the Rob Walton School of Conservation Futures at Arizona State University.

Common questions

What are indirect costs in a grant budget? Indirect costs support the organization rather than one project. Rent, utilities, accounting, insurance and administrative staff are typical examples. Funders usually cap them as a percentage instead of reviewing them line by line.

What is the difference between direct and indirect costs? A direct cost exists because of the project and stops when the project stops. An indirect cost keeps the organization operating whichever grants are active. Field staff salaries are direct. The finance officer who processes grant reports is indirect.

How do you calculate indirect costs? Organizations apply a rate to a defined cost base, most often modified total direct costs. Some hold a rate negotiated with a government funder. Others elect a standard rate the funder allows, which on U.S. federal awards is up to 15% of modified total direct costs. The base and the rate both matter, so check what the specific funder counts as includable.

What is a concept note? A concept note is a short proposal, usually two to five pages, that introduces a project to a funder before a full application. It covers the problem, the proposed approach, the expected results and the resources needed.

What does it mean to cross-walk a budget with the narrative? Cross-walking means checking every budget line against the activities described in the proposal, and every activity against the lines that fund it. A funder reads both documents together. Anything in one that has no counterpart in the other reads as a gap.

Do you need finance experience to take the budgeting course? No. Building and Managing Conservation Budgets is built for conservation professionals who shape projects without holding a finance role, including program officers, project managers, field implementers, grant writers and partnership leads.

Which course comes first? Either. Inside the certificate the budgeting course precedes fundraising, following the order a project moves. Taken on their own, either one works as an entry point.

Start with the budget

Once the money arrives, the work shifts from costing the plan to holding it together. That is the subject of Managing Conservation Projects through Uncertainty and of the companion piece on keeping a conservation project on track. 

To build the budget first, Building and Managing Conservation Budgets is open for enrollment. The full course catalog has more than 20 programs across practitioner skills, executive strategy and career discovery.