Financial principles and budgets

Question 1

Why do we need to show fixed and variable costs

Reassuring and building trust with supporters

Answer 1

There is a mystique with charitable spending. People are less understanding of the importance of fixed costs e.g. salary, office space etc all the things that are needed in order to make impact happen. It is so crucial to normalise this for fundraising success in the sector.

Question 2

Why is it important to include direct and indirect costs.

Answer 2

There is a mystique with charitable spending. People are less understanding of the importance of indirect costs e.g. salary, office space etc all the things that are needed in order to make impact happen. It is so crucial to normalise indirect for fundraising success in the sector.

Question 3

What circumstances might you be able to apply gift aid

Answer 3

If an employee of one of our corporate partners is taking up self-funded challenge and asking for sponsorship from family and friends. The gift aid could significantly increase the fundraising and impact that his efforts can achieve.

Question 4

Two KPI to keep budget on track

Answer 4

Actual income
Forecast income

Highlights variance. Allows us to make strategic decisions and pivot to best ensure we maximise opportunities and succeed.

E.g. our Innovation Challenge budget line is slower than we thought so our actual and forecast income aren’t matching up, we can identify the risk to our income, analyse the performance against trends, and try a different approach.