What are the types of budget?

There are two types of budgets: Activity Budget and Line-Item Budget.

Activity budget, as the name suggests, covers the costs required for implementing a project activity. For example, if your project strategy is about building the capacity of civil society leaders in your area, then you usually organize workshops as part of the activity. Organizing workshops has costs involved: There are costs towards hiring resource persons, booking a venue where participants can gather, their transportation cost, food, lodging and materials and handouts.

When developing such an activity budget, you need to break up each and every expense as given below. Please make sure that you list the unit costs of each expense. Whether you are organizing the workshop for one day or 3 days, ou need to show that ‘per day’ expenses of the trainer, participants etc. Then present the total amount of the activity. This helps the donor get a full clarity of the project activity and its costs.

budget_1

A Line-Item budget can be known under different names but they can be quite complicated unlike an Activity budget. A Line-item budget requires you to present the budget under broad areas. As you can see in the image below, there are categories (in most cases, given by donors in proposal formats) and you are required to break the budget under these categories. Major donors like USAID, European Commission prefer to have their budgets as line items which can be quire complicated.