Full Cost Recovery – Financial Sustainability

On Tuesday 21st July, CommUNITY Barnet will be running a financial workshop, covering all you need to know about Full Cost Recovery.

Have you ever puzzled over the term FCR?

Do you want to learn how to take a Full Cost Recovery approach to calculating budgets for funding applications?

Would you like a simple template, which helps you to calculate budgets accurately?

If the answer is YES to at least one of these questions, then come to CommUNITY Barnet's Full Cost Recovery Workshop on Tuesday 21st July between 10:00 am and 1:00 pm.

Afterwards, our Finance Manager will be available to offer an additional 15-minute expert financial advice session on a 1:1 basis for those who would like it between 1:00 pm and 2:30 pm. These will need to be booked separately. Please email jennifer.mahon@communitybarnet.org.uk if you would like to book a session.

Book your place now - https://member.communitybarnet.org.uk/civicrm/event/info?reset=1&id=49

It is crucial that the full costs of a project are recovered to avoid creating a deficit for the organisation, which has to be met through additional fundraising or through other means.

In order for organisations to generate income, the following are carried out:

•Fund raising activities

•Donations

•Fees and charges

•Grants

•Contracts

•Sponsorship

Full Cost Recovery is about securing funding for, or recovering, all costs, including direct costs of projects and all overheads. Every organisation needs to recover its costs, regardless of whether it is based in the voluntary, public or private sector, and ideally generate a surplus in order to pay its employees. Furthermore, office space will need to be rented, products and services need to be offered, plans should be made for the future, and the development and delivery of services should persevere.

Full Cost Recovery has become so important as a result of pressure on funding, the requirement for greater transparency and the accurate calculation of costs when contracting. Moreover, FCR is a mechanism to allocate overhead costs to projects that is easy to understand and acceptable to funders.

Organisations need to get better at saying ‘NO’ or respond with the following: ‘We can deliver a service, but we can deliver this service at a certain price.’ The benefits (FCR for Funded Organisations) are as follows:

•Improved management costs

•Comparing costs with available funding

•Deciding how and whether to bid

•Improved ability to negotiate with funders and secure full funding

Admin and IT are a significant part of an organisation, which help it to run smoothly; one is unable to imagine an organisation without Admin or IT. A considerable amount of resources are used when one person delivers, using the classroom.

There are two costs: the average cost and the marginal cost.

Full Cost Recover has a principle, where a person should spend their time working on a project they have been allocated to.

Social Media, which is very common nowadays, is all about getting the message out there with the high number of people online, being kept informed by various news articles and tweets on popular sites, such as Facebook and Twitter.

It is essential to remember that organisations, charities and community groups are not businesses in the true sense of the word; however, they behave like small businesses in order to ensure long-term future/sustainability.

There is a greater need to ensure they operate the FCR Model when applying for grants/bidding for contracts to ensure this future.