Finance

How to avoid having your funding pulled

Learn the lesson from the charity that was on the verge of receiving £10 million in funding from a government department - but ended up having it pulled

 

Recently, an unnamed charity was on the verge of receiving £10 million in funding from a government department

Almost everything was in place for the funding to be released to the charity. However, it had to be pulled at the final hour because the charity couldn’t demonstrate full control over its expenditure. The government department needed to know that the charity was able to use restricted funds only for designated work and the projects outlined in the funding application.

Sadly, the charity was unable to stand up to the scrutiny of an audit of how staff spent their time, on which projects and when.

The charity involved was understandably crestfallen. Although it had an excellent track record for controlling costs against budgets, they failed because they couldn’t demonstrate that staff routinely completed detailed time sheets showing how their time was spent. 

They’re not alone. Many charities simply allocate time as a ‘month end’ process with little back-up to justify the time allocation. Many resort to ‘guesstimating’ hours spent because staff just haven’t properly kept track.

 

The value of timesheets

In the case of the charity, accurately completed timesheets would have been worth £10 million, as they would have helped secure the funding. It’s a sad tale that’s repeated all too often because casual time sheet recording is the typical practice among Not for Profits (NFPs). But it doesn’t have to be this way.

Even a simple time sheet system can reveal valuable information about where and how time is expended. This can lead to more accurate estimates for projects in the future, may uncover other inefficiencies in working methods and could alert management to staff being over or under worked so that projects can be better managed.

 

Tips for getting funding approved

  1. Double-check that you can deliver the specified service within budget.
  2. Discover what's important to the funding provider. Initiate personal contact with it before you start writing your bid.
  3. Avoid jargon. Trusts, companies and government bodies may not understand the jargon used by your charity, keep the language plain and simple.
  4. Explain succinctly what your not for profit achieves. The department or donor might not understand what your organisation does and why it deserves funding.
  5. Have your evidence to hand. You may need to be able to show your good works, so create case studies and collect testimonies to prove your claims.
  6. Demonstrate that you can be audited on where time and hours are spent. Software can make it easy to track time spent on a daily or weekly basis, online for office based staff and via mobile time sheets for those out in the field.