Types of Funding:
Core funding, or operating funding, refers to the capital required to run the operating expenses of your organization. Rent, utilities, receptionist, telephones, copier and other overhead are all operating expenses. In general, core funding may be more difficult to obtain because the results of a grant or gift tend to be less tangible. Moreover, funders are often concerned that if they are paying for an organization’s daily expenses, the organization may come to expect ongoing funding. Government sources, however, tend to be more amenable to core funding. Another good source for core funding is from individual supporters who are tend to be more willing than corporations and foundations to provide operating costs. Also, sales of services or publications from which your organization draws income should be allocated as core funds.
Project funding is designated for a particular task or project. The publication of a book, a speaking tour or a seminar are a few examples of projects. Foundations and corporations tend to prefer to give project funding over core funding because the results of the project are more obvious and quantifiable. It is usually easier to acquire project funding than core funding. Therefore it is generally a good idea to define elements of your staff’s operations as a project rather than as core. This approach is especially useful for service organizations whose budgets may appear to be almost entirely overhead. For example, assume some members of the staff of a service organization regularly publish brochures about nutrition. That aspect of their work, from their salaries to the cost of running the copier, can be considered part of the organization’s overhead or core expenses. Alternatively, each brochure or set of brochures can be considered a project. If ten percent of the staff’s time is spent producing the brochures and most of the copier use is dedicated to the brochures, then those costs can be categorized in the budget as project expenses. Even a portion of the utilities and other office expenses can be calculated as project costs.
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