Why is the work important? To establish the significance of your proposed project, you first need to put it into context, addressing three key areas--project background, the current literature and gaps in the existing body of knowledge.
Describe the background leading to your proposal. Briefly explain what you have observed in your own research or in current trends of your profession that leads you to further exploration. (You will have the opportunity to provide a more detailed description of your preliminary work in the next section.)
In the literature review, provide a critical evaluation of existing knowledge. The literature review does not have to be exhaustive, but must be sufficiently thorough to convince reviewers that you are up to date on the state of the field. Demonstrate that you are familiar with your field, that you understand it and that you have a balanced knowledge of it. Cite recent literature and, if appropriate, indicate your awareness of any discrepancies or inaccuracies in the literature. If you are familiar with important work that is not yet published, include that work in your review, if allowable. Use the literature review to demonstrate your ability to discriminate wisely by citing only recent, important, and relevant work.
Specifically, identify the gaps in knowledge that your project is intended to fill. If no gaps exist that are obviously and directly related to your project, explain how your proposed research will contribute to the overall understanding of your field. For example, your project may involve developing new methods that would facilitate further research in your field.
Now that you have established the context for your proposed project, explain its significance. Describe potential impacts of your project within your field of study and in a broader context. For example, your proposed project may provide improved education for a particular group of people or lead to a new treatment for a particular disease. Clearly explain how the project is relevant to the goals of the sponsor.