Author: admin

Date: August 18, 2023

Category: News

Reading time: 6.7 mins

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Author: admin

Date: August 18, 2023

Category: News

Reading time: 6.7 mins

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Defining ‘Core Costs’ & Sustainable Funding Access

As a Community Interest Company, Umbrella Yoga reinvests all profits into providing Yoga classes for all abilities. Since our inception, we have been offering the majority of our sessions absolutely free, to improve people’s mental health and wellbeing.

The four key groups we work with include Community Yoga, Adults with Learning Disabilities Older People and Dementia groups, and Trauma Survivors.

We supplement this work with our Staff Wellbeing classes, which we offer to corporate partners.

Our key mission is to provide sustainable, inclusive, and accessible Yoga for all needs and abilities. In order to do this, and to do it well, we require core operational costs to be supported.

Currently most of our income is from grant-funding, (i.e. time limited income streams which end after the grant has been spent, usually after 1-12 months).

For this reason, our executive team spend a sizable percentage of their time searching for, and writing funding applications.

“We recognise that organisations have core costs and they need funding. The funding has to come from somewhere. You can’t deliver anything in a vacuum.”

(Gilly Green, Comic Relief)

Whilst we actively collaborate and provide sessions in partnership with other local non-profit organisations, most of these organisations face similar funding struggles similar to our own!

Therefore even though these organisations usually have some of their own funding to contribute in exchange for services, often these only make up a small contribution to our overall running costs.

‘Core funding’ is commonly used as shorthand by both funders and grantees to mean financial support for: non-projects costs; general operating costs; core costs; central costs; running costs; management, administration and office costs; and overheads and support costs.

“Core funding encompasses the funding that contributes towards the core costs of running an organisation, including support costs (as defined by the Charity Commission’s statement of recommended practice, or SORP4), income generation and governance activities.

FUNDING OF CORE COSTS IS USUALLY ACHIEVED IN ONE OF THREE WAYS:

Full cost recovery, which funds the full cost of a project (or service), as well as the direct cost of delivery and a proportion of the overhead costs

Restricted grants to cover core costs or fund planning activities or monitoring and evaluation activities

Unrestricted grants, which are given on the basis that they will be spent in accordance with furthering the charity’s objects

Each of these types of core funding do slightly different things – for example, full cost recovery is a way of recognising and paying for the back office activities associated with running a project; this is quite different from unrestricted grants that support the mission of an organisation as a whole. Each type of core funding may carry a slightly different strategic intent from the funder.”

 

“For Umbrella Yoga, just some of these core costs include: research and engagement, in-person networking and desk-based work to seek out new partners, recruitment of teachers, and provision of training…community-outreach, feedback sessions, advertising, funding-reporting, bid writing, communications content creation- including website updates, newsletters, blogs, emails, informational posters and social media content- and the list goes on…”

 

In addition, our biggest outlay is ensuring we can pay our specialist Yoga teachers £30 per hour of specialised class delivery.

Initially we hoped that corporate yoga sessions and staff wellbeing sessions could generate the majority of income needed to support the more vulnerable groups we prioritise our work with.

We had envisioned that corporate partners with dedicated reserves to invest in giving back to communities [as part of their Corporate Social Responsibility] would provide a sustainable income stream that flowed back into funding our core work.

The idea was that this would work like the ‘Pay it forward’ scheme – where people who can afford to do so – contribute money for another person to have a free hot drink when buying their own.

Sadly this was not to be – as nearly all the private businesses we approached were not receptive to this idea! However, lucky for us, Kirklees third sector businesses and social enterprises have been, and we owe much of our current success to their willingness to trust in and believe in the value of our work, partner with us and pay us for it, or collaboratively seek grants to work together, where they are able to do so.

Within this culture of struggle to fund sustainable ways to scale impact and support more people to benefit from our offer, we continue to explore ways to make this trading income piece of the business successful. Whilst doing so we are still exploring grants which support core operational costs.

A recent example of this struggle was a refusal to fund our core work by a very large, and well-known Grant provider.

This grant-body expected us to deliver over 50 hours- worth of Yoga classes, but with no financial support for ANY core costs.

We were told to edit our draft grant submission and ‘hide’ the core costs by embedding them elsewhere in our project costs, which we duly did.

When the funder response to our next application proved even more punitive, we sent them some feedback, and refused their grant offer.

We shared openly why we couldn’t deliver our services with the under-budget offer they were putting on the table. We all agreed it was a shame but we had to walk away from their offer, as it fell more than 25% short of the funding needed to deliver such a large project.

It helps to think of core costs as the biggest part of the ‘iceberg’ … the majority of the work is out of sight, submerged.

Yet it’s this work that forms the foundation of delivering all of the benefits of a high quality service- and a service that can be reliably delivered and sustained.

As the NCVO point out in their 2017 review of funding ,“Core funding is an investment”

“…Core funding isn’t sought to give leaders and staff a break; it is used to explore new funding models, build new partnerships, and foster new approaches to service delivery.

…Established and successful services are vital to the beneficiaries they serve. Core funding allows important services to continue at a time when they often struggle to attract funding because it is not new work… While there are some funders, such as BIG Lottery Fund, who operate a full cost recovery model – allowing applicants to apply for funding for both direct project costs and a proportionate share of the organisation’s overheads – this is the exception rather than the rule.”

In their 2017 report the NCVO also found:

…”While funding was the clear top concern, more applicants had grown in income size over the two years prior to application than receded, yet funding was the top concern. This may be due to an increase in project funds – but not core funds – leading to a lack of overall sustainability.

Umbrella Yoga believe it’s time for corporations and grant-makers to revisit the true costs and benefits of funding core activities of all organisations. Our services are creating social value cost-savings equivalent to over 5 times the return on investment, as are many others like us- by supporting organisations and communities of need.

,“Core funding is great because it provides greater stability, continuity and flexibility and it also saves time because all the time that you are trying to get project money you are not actually doing the job you are here for.” [1.]

Recommended reading for those wanting to take a deeper dive into the subject of sustainable funding for core costs:

Featured in this picture is one our wonderful Learning Disabilities class participants.

1.,https://www.ivar.org.uk/wp-content/uploads/2016/07/IVAR_ThinkingAbout_CoreFunding.pdf

2.,https://blogs.ncvo.org.uk/2017/05/04/core-funding-is-an-investment-not-a-safety-blanket/

3. ,https://issuu.com/esmeefairbairn/docs/insightsoncorefunding

4.,https://www2.fundsforngos.org/featured/what-is-core-funding-and-how-to-get-it/

Featured in this picture are two of our fantastic volunteers- Wendy and Paula.

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