Ten Steps to the Perfect Funding Bid: step 8

Value for Money – realistic costing:

Scroll back to an earlier blog that released the information the Lottery didn’t want you to know – the reasons why most Lottery bids are rejected.  In third place was “not demonstrating value for money”.  This makes this topic incredibly important, yet most people feel it’s incredibly intangible.

Although you will not usually have to show a “unit cost” (ie cost per person / session / event etc), working this out can be a useful internal exercise to give you a sense of whether the project offers good value for money.  For example, a volunteer home-visiting service for social purposes / gardening / dog-walking becomes unrealistic if the “unit cost” works out at £50 per home visit, because you are planning a full-time paid worker with an office and computer, costing you £25,000 pa, and you are estimating 10 home visits per week (500 per year, giving a unit cost of £50). 

On the other hand, a funder will be worried about your project management abilities if you bid too low!  If it looks like you are unaware of some of the related costs of your project (insurance, volunteer expenses, equipment maintenance) they may throw out your bid.  So show ALL the costs, and then what you are bidding for separately.  Including a share of overheads is important, as are volunteer out-of-pocket expenses (NOT a flat daily or sessional rate).

So try out your unit cost on people who aren’t involved in your project or organisation.  Their gut instinct will be similar to those of the Trustees of the charitable trust or foundation.  In other words – they’re not experts either!  You don’t need to be a social care provider or commissioner to know that the befriending / dog-walking / gardening volunteers in the example above are pretty expensive at £50 an hour.

Remember – even though the form might not ask for your costs to be broken down to a unit cost, somebody reading your application will do a rough calculation to work it out.  Some trusts use external appraisers, and they will almost certainly do it!  It’s one of the first things I do when I’m doing appraisals. 

The next blog will outline the two simple ways to reduce the unit cost, to make the project demonstrate better value-for-money. 

©  Tamara Essex 2010

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