Make sure your figures are good resolution, or vector based.
Please don’t use screen shots for real images.
Figures made in Power Point can look great in Word. Here is a good option for importing them as vector images. PPT isn’t my preferred tool as a professional, but it can work just fine if you import the images into Word with care.
If you are including a conceptual flow chart, or logic-diagram-type-of-image, don’t have everything pointing at everything. We know all your subjects are connected, but when everything is pointing at everything, there is no real information. Have restraint.
Make the size of your canvas the real size it’s going to be in your proposal.
Proposals are always on 8.5X11 pages with usually 1 inch margins, so the largest your figure can be is 6.5inX9in. Working in real-life sizes is critical to maintaining reasonable font sizes.
Full-width images are great, and half-width images are great. But between 4 and 6 inches wide is a little silly because the resulting gutter for body text is too narrow. It can work if you put the caption on the side, or if you are willing to just up the edge space to white space. (But I know the strict page limits always loom large!)
When mocking up the layout of your image, think about those outer boundaries/edges of your image. It’s probably going to be inserted into Word as a rectangle, so if you have one component way off to the side, it’s going to make the whole image larger, and space is always at a premium.
I like the look of a thin vertical figure in a proposal, but often PIs want to recycle their images in Power Point, and a tall-thin figure isn’t so good for that.
Choose the minimum font size you are willing to use within the figure. This might be specified by your funding agency, but often it’s not. 8pt is a solid choice. When I look at grant proposals, it’s very common for graphs to have 4pt font or smaller, but I think that is too small. I personally won’t go smaller than 6pt. Here is a menu showing what different options look like.
Using 12pt+ within a figure in a grant proposal is very unusual and looks weird.
Since you have chosen a minimum font size for your figure, use that size for almost all the text within the figure. If you need to create a hierarchy of text, bold or underlining is a nice option. You can also use larger font size for the title, but often space is at a premium, and we have established that your minimum is perfectly readable.
For typeface, I generally stick to Arial. If you use the default font du jour in Microsoft, it’s a sign that you made it in power point. Not a big deal, but Arial is fairly timeless at this point and never looks out of place.
Contrast and color are tools. Use them judiciously. If you use high-contrast, jarring colors everywhere, then you’ve wasted one of your best tools. If you write an entire email in all caps, then you can’t use capital letters to emphasize your MOST IMPORTANT POINT. Have restraint.