Donor agencies emphasize on covering activity costs. In fact, some donors can only fund activities. However, for larger project proposals, there will be overheads and staff costs on top of the activities that are listed out. To implement activities you are required to have human resources, an office and other operational mechanisms. These costs often fall under the line-item budget.
Human resources can be costs towards salaries for project officers, project assistants, accountant or even consultants responsible for implementing the activities.
There are operating costs like rent, telephone, travel that are necessary to support the successful execution of your project activities.
Costs towards monitoring and evaluation should also be included in the budget. In most project proposal formats, donors require NGOs to submit a monitoring and evaluation plan. This plan may require extra costs like hiring an external evaluator or carry out extra research work. The costs associated with such a process can be mentioned in the budget.
Some costs for contingency can be added if your NGO is working in a volatile situation where most conditions are out of control such a conflict-affected project area. In any case, you need to justify this amount and it may require some break-up to be done like costs towards communication during an emergency etc.
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