Grant Budgets
Level of Effort in a Grant Budget
Marisa Calderón, GPC
August 13, 2026 · 4 min read
Table of contents
Key takeaways
- Level of effort is the share of a person's working time committed to the project, expressed as FTE, person-months, or a percentage.
- Whatever you commit becomes an obligation you must be able to evidence in time records after award.
- Effort across all of a person's projects cannot exceed 100%, and reviewers do check this across applications.
- Do not label a person's services level of effort when the funder's rules require them to be budgeted as a consultant.
Level of effort is the share of a person's working time committed to your project. It is the number that drives your largest budget category, and it is also a promise: whatever you commit at proposal stage becomes something you must be able to evidence in time records once the money arrives.
The three ways to express it
All three describe the same thing. Funders differ in which they require.
| Expression | Example | Used by |
|---|---|---|
| Decimal FTE | 0.5 FTE | Most federal and foundation budgets |
| Person-months | 6 calendar months | NIH and several research agencies |
| Percentage of time | 50% | Common in foundation and state budgets |
Converting between them is straightforward once you fix the base period:
- FTE × months in the budget period = person-months. 0.5 FTE × 12 months = 6 person-months.
- Person-months ÷ months in period = FTE. 3 person-months over 12 = 0.25 FTE.
- FTE × 100 = percentage.
NIH splits person-months into calendar, academic, and summer months, which matters for faculty on nine-month appointments. A professor at 25% effort across a nine-month academic appointment is 2.25 academic person-months, not 3 calendar months, and entering the wrong one misstates both the effort and the salary.
Calculating the charge
The line item follows the standard budget line item pattern:
Project Coordinator: 0.5 FTE × 12 months × $58,000/yr = $29,000 Fringe benefits: $29,000 × 28.4% = $8,236
Three things to get right:
Use the institutional base salary, not a rate you have adjusted to fit the budget. Where an agency imposes a salary cap, apply the cap and note it.
Apply fringe to the charged salary, not the full salary. Fringe on $29,000, not on $58,000.
Escalate across years explicitly. A three-year budget at a flat salary implies either no raises or an unfunded shortfall. State the escalation ("3% annually, consistent with organizational policy") rather than leaving reviewers to wonder.
The commitment you are making
This is the part proposal writers underestimate. Committed effort is auditable.
You must be able to document it. Federal awards require records supporting how personnel costs were allocated. If you charged 0.5 FTE, your records must reasonably reflect that the person spent about half their time on the project. Discovering at audit that they spent a tenth of it is a disallowed cost, repayable.
Total effort cannot exceed 100%. Across every project, plus teaching, administration, and clinical duties. Agencies increasingly cross-check this against a person's other applications and active awards, and an over-commitment surfaced at award stage forces you to reduce effort somewhere, usually damaging the plan you were funded for.
Reductions may need approval. Under federal rules, reducing a key person's effort by 25% or more from the approved level typically requires prior approval from the awarding agency. This is a live post-award compliance obligation, not a formality.
Zero-effort commitments raise flags. Naming a senior figure as involved while budgeting no effort for them is common and increasingly questioned. If they matter, budget them; if they do not, do not list them.
Effort versus consultant rates
A recurring confusion, and a real compliance issue.
Level of effort applies to your employees. Salary and fringe charged proportionally to time worked.
Consultants are not effort. An individual outside your organization providing professional services is budgeted at a daily or hourly rate, under the funder's consultant or other category, with no fringe applied. Some funders cap consultant day rates, and some require justification above a threshold.
Describing a consultant's engagement as "0.2 FTE" is a category error that will be picked up. If they are not on your payroll, they do not have an FTE with you.
Likewise, an organization performing a scope of work is contractual, budgeted as a subaward with its own internal budget, not as effort on yours.
Writing the justification
The budget gives the number; the narrative explains what the person will actually do. A justification that repeats the job title has wasted the space.
Weak: "Project Coordinator, 0.5 FTE. The Project Coordinator will coordinate the project."
Strong: "Project Coordinator, 0.5 FTE (6 person-months/yr). Schedules and staffs 208 pantry sessions annually, maintains the participant tracking system, and compiles quarterly data for the evaluator. The 0.5 allocation reflects 16 hours of direct site coordination and 4 hours of data and reporting work per week."
The second version makes the effort level derivable from the work described. That is what makes a reviewer believe the number, and it is what you will be glad of at audit.
Our budget narrative template uses this format throughout, and the grant budget builder will calculate the FTE arithmetic and fringe for you. For where personnel sits among the other categories, see grant budget line items and the grant budget guide.
