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partnerships:azp:fin

Financial Sustainability

Development Trusts have to manage a delicate balancing act with their finances. On the one hand they must deliver some benefits to their community which cost rather than earn money; on the other hand they are under pressure from funders to cut their dependence on grant.

  • The balance between projects which are spenders and those which are earners is at the heart of the Trust's business plan. It should be reflected in the initial bid to funders.
  • The first core funding received by a Trust to pay for staff and overheads is likely to taper away within a few years. Unless the Trust can replace that funding, or earn substantial sums from its projects, it will not be able to sustain its operations.
  • Earning projects will take some time to yield revenue. A Trust should think about income generation from the start. If possible get a funder to provide capital for workspace or a similar asset which can produce long-term income.
  • Avoid losing money by setting up sound financial systems from the start.

Checklist

  • Does the Trust have a business plan?
  • Does the Trust have a fundraising and sponsorship strategy with clear goals for: meeting core costs? developing an asset base? developing and running projects?
  • Does the Trust have: written agreements with sponsoring and funding organisations? a spread of funding support? skills in assembling funding packages and in managing muli-source programmes?
  • Has the Trust set up: appropriate accounting procedures and financial systems with regular monitoring of costs and revenue? procedures for costing and pricing Trust activity? an efficient system for accurate measurement of income and expenditure on an accruals basis for projects?
  • Does the Trust comply with the reporting requirements of the Companies Act, Charity Commisioners and core sponsors?

© David Wilcox david@partnerships.org.uk. Tel +44 (0)1273 677377. Fax: +44 (0)1273 677379. These information sheets may be freely distributed with this attribution, but not republished as a whole. Partnerships Online : The Guide to Development Trusts and Partnerships: other sheets

partnerships/azp/fin.txt · Last modified: 2017/06/12 10:20 (external edit)