A to Z of funding (C)



Charities Aid Foundation
A large national charity that provides all sorts of services to charitable donors, does research into things charitable and publishes a wide range of books and directories.

Head office is:
Kings Hill
West Malling
Kent ME19 4TA
telephone 01732 520000
website www.cafonline.org

CAF also host CharityNet at www.charitynet.org, described as 'information for and about the non-profit world'.

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Charity Commission for England and Wales

The Charity Commission is the part of government that (in England and Wales) registers and regulates charities. They produce useful free publications and 'model' governing documents. If you use their documents as the basis of your constitution, Memorandum & Articles or trust deed it speeds up the registration process.

Most of their publications are available in English and Welsh and can be downloaded from their website. Go to www.charitycommission.gov.uk/publications</u>

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Core costs, central costs

The costs of keeping the organisation going, not directly connected to any particular project - e.g. administration, management, research and development, audit, HQ costs, IT and finance costs, administrative, personnel and training charges, insurances. Sometimes called 'central' costs.

A recent influential report suggested that for many charities these central costs included

  • the costs of compliance - with regulatory and funding bodies
  • the costs of income generation
  • the costs of responding to consultation
  • the costs of governance, representation and user engagement
  • the costs of support services
  • the costs of innovation and quality.

When it comes to using phrases like 'core costs', central costs' or 'overheads', make it clear what is included and what isn't. If in doubt, spell it out. You might want to refer to the funding models described below.

The report on the funding of core costs offered three models for funders:

  • full project funding
  • the development model
  • the strategic model

These models are beginning to be used by funders and it may be useful to grant-seekers to write a budget for a funder in terms of one of these models.

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Core funding

A very woolly term. Some people use 'core funding' to mean funding of the core mission of the organisation, as opposed to funding ancillary projects. Some people use it to mean funding of administration, as opposed to service delivery. Some people use it to mean continuous funding as opposed to time-limited funding.

Not only is the term woolly, it also attracts lots of argument and debate. Some people argue that the idea of 'core funding' is unhelpful and old-fashioned and doesn't help groups justify why they should get funding at all. They suggest that voluntary organisations should see everything in terms of ;project funding;, either with each 'project' contributing to the core costs, or the core activities themselves being seen (and sold to funders) as projects. Other groups try to fund their core activities out of income they get directly from the public or they earn themselves. It's probably best to talk about the funding of core costs (above) than 'core funding'.

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Corporate responsibility, company giving

Companies often give money to good causes or help them in other ways (gifts in kind or use of meeting rooms, for instance). When this is done formally - particularly by big companies like supermarket chains or petrol companies or banks, it's often done by a 'Corporate Responsibility Department' because companies feel they have corporate responsibilities to the environment they operate in and the communities their employees come from.

Company giving is often contrasted with sponsorship, which may be undertaken for much more commercial reasons.


The cost of something (in terms of money or time or other resources) can in theory be worked out objectively. This is in contrast to price, which is determined when something is sold.

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Cost centre

A systematic way of allocating income and expenditure to different activities. Each different activity is allocated its 'share' of (for example) salary costs.

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Cost effective

Can just mean 'as cheap as possible'. If you ask yourselves whether you can achieve the desired outcome by any cheaper method and come up with the answer 'No', then something is cost effective. Sometimes it's used to mean you get a lot of output (or outcome) for a little bit of spending.

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Costs: direct costs

Direct costs are costs directly related to the activity, such as the staff who work on that project, their expenses, the hire of the hall for the event.

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Costs: fixed costs

Fixed costs you have to pay regardless of how much or how little activity you carry out. For example, you may have to insure equipment or pay rates whether you do anything or not.

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Costs: full cost recovery

Full cost recovery means securing funding for, or 'recovering,' all your costs, including the direct costs of projects and a relevant proportion of all associated core costs.

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Costs: indirect costs

Indirect costs are costs not directly related to the activity, but still incurred by the organisation, and without which the activity wouldn't happen i.e. a share of the costs of managing and administrating the organisation.

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Costs: on-costs

Usually taken to mean the costs that follow on from employing staff - e.g. National Insurance, share of office costs, travel, training, management/supervision.

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Costs: recruitment costs

Recruitment costs can be significant. If the funding you are requesting is for staff, think through everything involved: advertising a job, preparing and sending out information (job description, Person, specification, information about the organisation) to applicants, shortlisting, interview costs. What if you fail to recruit first time? Might you need to recruit more than once during the life of the project?

Recruitment is an area where funders will expect to see evidence of a commitment to equal opportunities.

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Costs: recurring costs and set-up costs

Some costs are non-recurrent, i.e. you only have them once, especially near the start of a project, hence often called set-up or start-up cost e.g. recruitment, minor fitting out of offices, telephone connection charges, a feasibility study. It's worth separating them out from the recurrent costs - the ones that keep coming back - salaries, utilities, rent - so that you can predict what your costs will be in future years.

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Costs: running costs

A vague term usually taken to mean the costs of running an organisation or a project. If you use the term, state clearly what this does and does not include - salaries? all direct costs? indirect costs?

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Costs: unit costs

'Unit' in this phrase means 'one' as opposed to many, so the unit cost means 'the cost of one'. For example if you get 100 pamphlets printed at a cost of £300, the unit cost (the cost of producing each one) is £3.00. If it costs you £500 to have 1,000 of the same leaflets printed, the unit cost has fallen to 50p.

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Costs: variable costs

Variable costs go up or down depending on how much activity you carry out. Things like photocopying, travel, childcare expenses and stationery are likely to vary according to what you do.

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