The National Lottery Community Fund aims to fund community project’s where you are doing something new or enhancing existing services or activities. We define a project as a specific and distinct piece of work which require funding for a definitive period of time.
We’ve identified that some people applying to our large grant programme, People and Places, are unaware that they can however apply for a portion of their overheads. Rosie Dent from our Funding Advice Team has put together some questions and answers to help explain what full cost recovery is and how to calculate it to ensure you’re applying for all of the funding you need for your project.
What is full cost recovery?
Full cost recovery means securing funding for all of the costs involved in running a project. This means that you can request funding for the direct costs of your project costs as well as a proportionate share of your organisation’s overheads.
What are the direct and overhead costs of a project?
Direct project costs – Costs that relate clearly and directly to a project. These can include salaries for project workers, volunteer expenses and a dedicated laptop for the project.
Overheads – Costs that partly support the project, but also support other projects or activities that your organisation provides. These can include a proportion of salaries of core staff such as administrators, rent and utilities costs or your organisation’s legal and audit fees.
How do I apply full cost recovery?
If the project you’re applying for funding for is the only project you’ll be running, then you do not need to calculate your overheads separately – just request all of your costs as direct project costs. For example, if you’re running a lunch club once a week and don’t run any other work or projects. The lunches, venue hire and any volunteer expenses are direct costs.
If you are managing a number of projects or activities at the same time, you need to work out how to share out your organisation’s overheads to each project. For example, your organisation runs two projects from one building: a money advice service and a counselling service. You’re applying for funding to run a third project in the same building, a training service. You’ve worked out that the project’s direct costs include the trainer’s salary, books, stationery, a laptop and a projector. However the rent and utilities costs of the building are overheads which you should share fairly between all three projects.
How do I share out the overheads for each project?
There are a few things you will need to take into consideration when calculating the projects share of you overheads. These include staff and volunteer costs, floor space used and the amount of hours your project runs.
If you have any questions about full cost recovery, please email us at firstname.lastname@example.org or call our Funding Advice Team on 0300 123 0735.