About Proposal Development

First, identify the type of funding you are applying for using Fund Bucket Project Definitions.

Locate Funding

The principal investigator (PI)/department are responsible for locating a potential funding source.

Once you find a potential sponsor, obtain and carefully review the sponsor’s guidelines and application materials. Next, create the project’s statement of work and determine whether the project is eligible to apply for funding from the sponsor. Also determine the type of sponsored project and the proposal’s overall purpose to establish the key deliverables and deadlines the sponsor requires. 

The Office of the Vice President for Research and Innovation provides information about the following funding opportunities:

Support to secure philanthropic funding when using the UMN Foundation’s 501(c)(3) status or applying to a centrally managed private or corporate foundation can be found via the Charitable Grants Resource Hub (UMN login required). For cross-discipline or large-scale grant project support, contact the Research Development Office.

Starting a Proposal

All PRFs must be routed with MN-GEMS.

Create a Budget

Once you obtain all key information, carefully review the sponsor’s guidelines to ensure all instructions are followed. The pre-award DRA will assist you in creating the budget by performing necessary research and calculations to arrive at the overall costs for each budget category within the proposal. In addition, a detailed budget justification must be captured for all costs listed within the proposal budget.

A proposal budget is:

  • a carefully calculated and detailed document that outlines the total funds needed to conduct a sponsored project
  • a financial expression of the project that includes a detailed breakdown of the estimated costs of expense categories such as personnel, travel, supplies, and facilities and administrative (F&A) costs
  • always accompanied by a proposal budget justification

A detailed budget justification is a University requirement for all proposals, regardless of whether the sponsor requires one as part of its submission. This is a longstanding requirement documented in SPA's published proposal development guidance and supported by the University's Administrative Policy: Direct Costs on Sponsored Projects.

Additionally, the University's Administrative Policy: Direct Costs on Sponsored Projects establishes responsibilities for PIs to prepare and justify proposed costs and for DRAs to assist with budget preparation and review the justification of requested direct costs. These responsibilities extend to both federal and nonfederal sponsored projects.

The purpose of a budget justification extends well beyond satisfying sponsor submission requirements. It is a fundamental component of developing a responsible, defensible project budget and provides the documentation necessary for institutional review, approval, financial management, and compliance. At its most basic level, a budget justification should address the five Ws: who, what, when, where, and why, along with how the costs were calculated and how they benefit the proposed project. This includes identifying personnel and their responsibilities, explaining the necessity of equipment, supplies, travel, services, and other expenditures, and documenting the basis for the amounts requested. Simply listing dollar amounts in a budget does not establish why those costs are appropriate or necessary.

For federally funded projects, 2 CFR 200.403–200.405 establishes the fundamental cost principles governing allowability, reasonableness, and allocability, including the requirement that costs be adequately documented. Although these regulations do not universally require a standalone budget justification at proposal submission, the justification helps the University evaluate proposed expenditures against these standards and maintain appropriate institutional documentation.

The justification also serves several important institutional purposes:

  • Proposal review and institutional approval: Provides SPA with the information necessary to evaluate proposed expenditures, identify potential compliance concerns, and assess consistency with the scope of work and applicable requirements.
  • Financial accountability: Documents how costs were developed, why they are necessary, and how they directly benefit the proposed project.
  • Post-award administration: Provides Certified Approvers and post-award financial staff with the original financial rationale to support expenditure reviews, rebudgeting decisions, and ongoing financial monitoring.
  • Audit readiness: Establishes contemporaneous documentation supporting proposed expenditures and institutional decisions. Additional records may be needed to substantiate actual expenditures.
  • Consistency and institutional stewardship: Ensures the University applies consistent financial oversight practices rather than relying solely on the varying documentation requirements of individual sponsors.

A sponsor's decision not to request a budget justification does not eliminate the University's responsibility to establish and document the basis for its proposed costs. Sponsor submission requirements and University internal documentation requirements are not interchangeable. The expectation is that the PI/Dept provide sufficient detail to explain and support the proposed costs and demonstrate their relationship to the project. This is a basic element of sound research administration and is incorporated into the proposal development process from the outset.

If DRAs need assistance preparing budget justifications, they should work with their Certified Approvers or departmental post-award financial staff, who can assist with the financial rationale and supporting calculations. University training resources are also available. SPA will continue to require budget justifications for all proposals, consistent with established University guidance. This requirement is not waived simply because a sponsor does not request the document.

For reference:

Proposal Development Considerations

Labor Related

When a working with a University employee for non-university consultation, use Intra-University Consulting Fees. 

Charging Administrative and Clerical and Programmatic Salarycosts

Follow this format when requesting administrative or clerical costs in a federal budget:

“This award includes management of 15 subawards. This volume and the tight timeline of the project mandate more extensive monitoring than the services routinely provided by the department. A XX% time program assistant is needed to oversee the subrecipients’ activities, including working with SPA to perform risk assessment and subrecipient monitoring, ensuring timely delivery and review of invoices, acquiring progress reports and ensuring their review, resolving mid-project issues, monitoring compliance approvals, ensuring timely payments, and handling subaward modifications. We are therefore requesting agency approval for a [List % time appointment here] [List position title here] as an administrative cost allowed under 2 CFR 200.413.”

Office of Cost Analysis: F&A Rates, Effort Reporting 

The Office of Cost Analysis is responsible for calculation and negotiation of the federal reimbursement rate for facilities and administrative (F&A) expenses incurred in support of sponsored research and other sponsored projects. See the U-Policy: Requesting Facilities and Administrative (Indirect) Cost Reductions

Non-Labor-Related

International Considerations

The Research Compliance Office is responsible for export controls, including international research & travel.

Change in Equipment Capitalization Threshold

The Department of Health and Human Services (DHHS), our cognizant federal agency, has approved the University’s request to increase our equipment capitalization threshold from $2,500 to $5,000. This change will be effective on all purchases made on or after July 1, 2013.

Beginning July 1, 2013, all equipment purchased in the $2,500 and $4,999.99 must be charged using the appropriate Non-Capital Equipment actuals-level account code. As a result, F&A recovery will be assessed on items purchased on sponsored projects. However, the Controller’s Office and Office of Sponsored Projects Administration have developed a process to keep a sponsored project whole if it was budgeted and awarded under the old capitalization threshold.

Although an F&A expense will initially hit the sponsored project, it will automatically be reversed by the Controller’s Office if the award dates prior to January 1, 2014, and the Non-Capital Equipment account code was used to expense the purchased item. This automatic reversal of F&A charges will continue through June 30, 2015. New and competing renewals made on or after January 1, 2014, will be subject to F&A under the new capitalization threshold.

Cost Share Definition

The terms cost sharing, matching, and in-kind refer to that portion of the total project costs not borne by the sponsor. These three terms are often used interchangeably. There are also different forms of cost sharing. Learn more through SPECTRUM training on cost sharing fundamentals.

Subawards

If you require a formal written agreement made between the University of Minnesota and another legal entity (subrecipient) to programmatic activity under a University sponsored project, see the Subaward section.

Documenting Consulting Arrangements

As part of SPA’s internal proposal review process, we require documentation for all named consultants, regardless of whether they are paid or unpaid and regardless of the sponsor’s submission requirements. See the Documenting Consulting Arrangements in Proposal Job Aid for more information.

Business & Industry (B&I) Clinical Trials

UMN defines a clinical trial as “a prospective, biomedical, or behavioral research study of human or animal subjects that is designed to answer specific questions about biomedical or behavioral interventions (drugs, biologics, treatments, devices, or new ways of using known drugs, biologics, treatments, or devices). Behavioral interventions are intended to prevent or treat an acute or chronic disease or condition.” Pre-clinical research is not considered clinical activity.