Funding core costs: how to keep the lights on?

For small charities, covering core costs like salaries, equipment, office rental, heating and electricity can be a constant battle. Annoyingly, many funders list core costs as one of their exclusions, preferring only to fund direct project activities - even though nothing would get done without your staff and databases!

So how do you do it? Here are some ideas.

Cosy up

If you are a small charity that needs premises and office space to deliver your frontline work, could you save costs by sharing office space with a like-minded organisation? This can bring lots of extra benefits like networking and shared learning. It can also be great evidence to funders that you’re serious about partnership working. If you own a premises, could you have a winter clearout to create some space and invite another organisation to join you there and split the bills? If you regularly pay for room hire to deliver your projects, could you find a venue that might host your sessions in return for in-kind payment?

Corporate Connections

If you are able to build links with local businesses, corporate donations can sometimes be unrestricted and then directed towards core costs. Businesses are acutely aware of increased costs at this time and might be willing to help. Starting a conversation may give you the opportunity to set up a reciprocal agreement, like providing volunteering opportunities for their staff in return for a grant or being their Charity of the Year.

Events

Community fundraising events ranging from cake sales to sponsored challenges can be a useful way to raise unrestricted income to cover core costs. If you don’t already use community fundraising, why not pilot a one-off event to work out your return on investment, taking into account staff time and resources.

Trading

Depending on the expertise and resources of your organisation, could you explore selling merchandise or expertise (e.g. training courses or masterclasses) to generate unrestricted income? Make sure your quotes and prices include a percentage to cover core costs too.

Winter-proof your budget

If you don’t already take this approach, why not consider splitting some of your core costs across the projects you deliver, for example adding 10-20% to cover overheads. Not all funders may be open to this approach but it is a good option to test out.

Grants

Although many funders don’t like funding core costs such as heating and bills, there are some that do. Investing some time in finding out which these are and submitting applications is a worthwhile long-term strategy.

Keep in touch with your current funders

At the time of the first round of Cost of Living support from the government to individuals, some funders (such as Comic Relief Groundwork) took the initiative to automatically top up their grants in recognition of inflation. If you have good relationships with your funders there might be scope to start a discussion about a top-up that reflects your current costs.

Cost of Living funding

During the winter, many funders, like local councils and the National Lottery, open additional pots of funding specifically for warm space activities and you can often include core costs in these bids. Getting to know your local Community Foundation is another great way of finding core costs and cost of living funding in your area. And finally…make sure you are signed up to fundraising networks like Charity Excellence or the Chartered Institute of Fundraising to keep updated as new funding rounds open.

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If you need more help with finding funding for your core costs, please feel free to get in touch with our team to find out how we can help.