South Yorkshire Funding Advice Bureau Information Sheets Last updated January 2004 All our information is produced in a standard sized typeface, but we can produce it in other formats on request South Yorkshire Funding Advice Bureau The Workstation 15 Paternoster Row Sheffield S1 2BX Tel: 0114 249 4343 email: enquiries@syfab.org.uk Website: www.syfab.org.uk Funding Advice Line 0114 276 5460 Registered Charity No: 1061118 Reg. Company No: 3030641 Fundraising for projects Almost all funders want to fund projects rather than organisations. It is far easier to raise money for something specific, like a piece of equipment or a particular activity or project, because funders want to feel their money is doing something, and they want to be able to see what their money is achieving. This presents a problem for many groups. The main need is often for ongoing revenue for things like rent and wages, yet many funders are not interested in this. This move away from funders granting money to support your ongoing (or ‘core’) costs to contracting for services and funding for short term measurable pieces of work, means that to attract funding now you too need to break your work down into specific projects or services. This means finding funding for your services rather than for your running costs. This may sound alarming initially. The way to overcome this is to ask funders to pay for things that contribute towards your general running costs but which are clearly defined and specific. You need to be able to think about your work in terms of ‘projects’ or ‘pieces’ of work that can be clearly defined, costed and measured. In this way you can package elements of your running costs into each project so that funders will continue to fund those less attractive items like rent and photocopying. What is a project? A project is a discrete piece of work with clear aims and outcomes that can be measured. The work of your organisation could break down into projects which might be new pieces of work; or a development of an existing piece of work; or the repackaging of existing work. Be as creative as you can in project thinking. For example, an Advice Centre could divide its work up into chunks such as employing two advisers; running a volunteers scheme; research and social policy work; and training provision. Each of these discrete projects would have to be carefully costed so that each of them includes a financial contribution towards the general running costs of the whole organisation. A ‘fundable’ project should be: Specific - a clearly identifiable piece of work or equipment. Meeting a need - you must be able to identify the need and explain how your work will address it. Important - to you, to your users, and to potential funders. Of benefit - the outcome should be effective and worthwhile. Realistic - the project must be achievable. Cost effective - it should demonstrate value for money, which doesn’t have to mean cheap. Topical - if possible it should reflect current concerns and practices. Relevant - to the funders concerned. Bite-sized - it should be an appropriate size for the funder. Large pieces of work can be broken down into smaller parts if necessary. Project costing There are a number of things to bear in mind if you approach your fundraising in this way: • When including a share of general costs or overheads into your project, make sure that the amount allocated is made on a sensible and realistic basis that can be explained. Don’t just pluck figures out of the air. For instance, if the project represents 20% of your total staff time then it would be reasonable to expect it to pay 20% of the rent and other running costs. • Your budget will have to reflect your project thinking and shift away from a single ‘core’ budget to one with different cost or project centres. • In costing each project you need to include one-off start up and capital costs and then divide your other costs into 3 categories - ‘direct’, ‘shared’, and ‘indirect’. • Direct costs are those that apply exclusively to the project, such as salaries and recruitment costs. • Shared costs are those that will be shared out proportionately between a number of different projects, like rent and cleaning. • Indirect costs are those that are incurred by the organisation as a whole and may include such items as insurance, audit fees, and management committee expenses. As with shared costs these can be worked out on a percentage basis. If you already get some core income from another source then that could cover your general costs so that you need only approach new funders for the interesting bits. Some problems and pitfalls with ‘project thinking’ • Beware of ‘fundability’ taking over from your original aims and objectives and becoming the driving force of your group. You need to aim to strike a balance between what you want to do and what funders will pay for. • Beware of developing such a fundable project that you are offered too much money! If this does happen you will need to ask some of the funders if they would be willing to let you spend their money on another project or activity, or let you carry it over into the next year. They will usually agree to some arrangement like this having already decided they want to support you. • If a project is not ‘fundable’ you may need to re-think it, re-design it or represent it to make it more fundable. If you cannot find a way of making it more attractive to funders you may have to do something else that is and find alternative ways of covering your original project. You may have to leave it for the time being - trends in funding may change, allowing you to pick it up at a later date. Useful books The Complete Guide to Creating and Managing New Projects by Alan Lawrie, Directory of Social Change, 2002 Directory of Social Change, 24 Stephenson Way, London NW1 2DP Tel: 020 7209 5151 Fax: 020 7391 4804 email: books@dsc.org.uk online: www.dsc.org.uk/charitybooks © SYFAB 2003 All rights reserved. Our information is produced for local community and voluntary groups. No permission is needed for limited reproduction if the Bureau is acknowledged. Large scale reproduction or inclusion in publications for sale must have written permission from the Bureau. The South Yorkshire Funding Advice Bureau welcomes your comments and criticism. 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