Community Project Budget: Cash, Overheads and Multi-Year Costs

A community project can be popular and still leave the organisation out of pocket. The budget needs to cover the work people see and the practical support that makes it possible.

This guide is for charities, community organisations and arts groups. The examples are invented to explain the calculations, not quotations or funding recommendations.

Start with a delivery unit

Suppose you plan 24 weekly sessions. For each session, list paid preparation, delivery, materials, venue and any access or travel support. Then add work that happens across the project, such as recruitment, safeguarding administration, supervision and evaluation.

| Illustrative cash cost | Calculation | Annual total | | --- | --- | --- | | Session delivery and preparation | 24 × £180 | £4,320 | | Venue | 24 × £40 | £960 | | Materials | 24 × £25 | £600 | | Participant travel and access | Costed working allowance | £1,200 | | Coordination | 12 days × £200 | £2,400 | | Evaluation | 3 days × £200 | £600 | | Direct costs | | £10,080 | | Allocated overheads | Calculation below | £1,800 | | Total annual cash cost | | £11,880 |

Replace the rates with appropriate pay guidance and actual quotes. The access allowance must become an explained provision based on participants' needs. This example does not include every cost that every project requires.

Give overheads a defensible basis

The National Lottery Community Fund's full cost recovery guidance distinguishes direct project costs from a proportionate share of costs that support several activities.

For example, suppose shared annual administration and premises costs are £12,000. If a documented allocation method assigns 15% to this project, the contribution is £1,800. Explain why 15% is appropriate: it might reflect recorded staff time, occupied space or another relevant measure. “We always add 15%” is not an explanation.

Do not also charge the same room hire or staff hours as direct costs. Check the particular funder's eligible costs and calculation method before requesting an overhead contribution.

Show how the money will arrive

For the £11,880 example, a draft income plan might be:

| Source | Amount | Status | | --- | --- | --- | | Grant request | £9,000 | To apply | | Organisation contribution | £1,880 | Subject to approval | | Local donation appeal | £1,000 | Forecast | | Total | £11,880 | |

A balanced forecast is not a fully funded project. Record the decision date, evidence and alternative plan for each uncertain source. If the donation appeal raises £400 rather than £1,000, identify the £600 gap before delivery begins.

Donated space and volunteer contributions may have value, but they cannot pay a cash invoice. Record them separately and follow the funder's instructions.

Extend the plan across several years

Do not copy year one into every column automatically. For a simple illustration, increasing the whole £11,880 annual cost by an assumed 3% gives:

| Year | Illustrative cost | | --- | --- | | 1 | £11,880.00 | | 2 | £12,236.40 | | 3 | £12,603.49 | | Three-year total | £36,719.89 |

The 3% is an example, not an inflation forecast. In a real budget, some costs are one-off, some contracts are fixed and staffing may change. Explain the assumptions line by line. Show how the project will continue, close responsibly or find replacement income after the grant.

Reaching Communities England is one programme that can support multi-year community work. Check its current scope; a plausible budget alone does not establish eligibility.

Connect the figures to people and evidence

An application should explain who shaped the sessions, why the proposed format responds to a need, how people will attend and what you will learn. “24 sessions” is an output. The intended change might be stronger social connections or improved confidence; explain how you will assess it without promising an outcome you cannot control.

Use consultation notes, relevant local information and partners' actual commitments. Separate what people told you from your interpretation.

Choose the support you need

• Have a complete draft? Ask Matt to review the application and budget.
• Still deciding the activity and partners? Project packaging helps organise the plan before writing.
• Planning several bids? Organisational funding strategy covers priorities and preparation.
• Considering that specific fund? Reaching Communities application support explains the human service and its boundaries.

Related: ACE budget template and contingency calculations.