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TRANSCRIPT
Financial Planning
Financial Planning
Fundraising for Archives
Objectives for today
• Understand and articulate our own organisational funding
model and benchmark its position relative to the sector.
• Understand how to analyse our cost base and
productivity and how this informs financial planning and
options.
• Take forward a development plan for improving financial
resilience.
Exercise
Instructions: In pairs, spend 5 minutes finding out about
your partner’s enthusiasms & concerns. Find out:
1 dream goal for today
1 waking nightmare
Be ready to introduce them and report back to the group on
what you were told.
1. Understanding Your Finances
The What –
Understanding your total budget
Analyse each element of your total expenditure.
Understand what you can control or influence directly
Learn how to make friends with your accountant and talk
their language.
Staffing 389,249
Premises 2,464
Transport 2,674
Equipment 12,436
Materials 21,329
ICT 12,768
Printing and stationery 10,500
Income (43,939)
A. Net controllable budget - 407,481
Premises recharges 80,879
Support service recharges 86,100
Depreciation 24,913
B. Subtotal non-
controllable
- 191,892
Net revenue budget (A+B) - 599,373
Handout 3 – Budget Book Case Study
What strikes you about this
budget:
• What figures seem low or
high to you?
• What is pretty typical?
• Which ratios stand out?
• Which figures can you
affect?
1. Total Cost of Service
2. Service ‘Recharge’
3. ‘Above’ and ‘below the
line’ costs
Key ConceptsStaffing 389,249
Premises 2,464
Transport 2,674
Equipment 12,436
Materials 21,329
ICT 12,768
Printing and stationery 10,500
Income (43,939)
A. Net controllable budget - 407,481
Premises recharges 80,879
Support service recharges 86,100
Depreciation 24,913
B. Subtotal non-
controllable
- 191,892
Net revenue budget (A+B) - 599,373
1. Total Cost of Service
2. Service ‘Recharge’
3. ‘Above’ and ‘below the
line’ costs
Key ConceptsStaffing 389,249
Premises 2,464
Transport 2,674
Equipment 12,436
Materials 21,329
ICT 12,768
Printing and stationery 10,500
Income (43,939)
A. Net controllable budget - 407,481
Premises recharges 80,879
Support service recharges 86,100
Depreciation 24,913
B. Subtotal non-
controllable
- 191,892
Net revenue budget (A+B) - 599,373
1. Total Cost of Service
2. Service ‘Recharge’
3. ‘Above’ and ‘below the
line’ costs
Key ConceptsStaffing 389,249
Premises 2,464
Transport 2,674
Equipment 12,436
Materials 21,329
ICT 12,768
Printing and stationery 10,500
Income (43,939)
A. Net controllable budget - 407,481
Premises recharges 80,879
Support service recharges 86,100
Depreciation 24,913
B. Subtotal non-
controllable
- 191,892
Net revenue budget (A+B) - 599,373
1. Total Cost of Service
2. Service ‘Recharge’
3. ‘Above’ and ‘below the
line’ costs
Key ConceptsStaffing 389,249
Premises 2,464
Transport 2,674
Equipment 12,436
Materials 21,329
ICT 12,768
Printing and stationery 10,500
Income (43,939)
A. Net controllable budget - 407,481
Premises recharges 80,879
Support service recharges 86,100
Depreciation 24,913
B. Subtotal non-
controllable
- 191,892
Net revenue budget (A+B) - 599,373
1. Total Cost of Service
2. Service ‘Recharge’
3. ‘Above’ and ‘below the
line’ costs
Key ConceptsStaffing 389,249
Premises 2,464
Transport 2,674
Equipment 12,436
Materials 21,329
ICT 12,768
Printing and stationery 10,500
Income (43,939)
A. Net controllable budget - 407,481
Premises recharges 80,879
Support service recharges 86,100
Depreciation 24,913
B. Subtotal non-
controllable
- 191,892
Net revenue budget (A+B) - 599,373
Above
Below
Full Cost Recovery
• Do your fees and charges cover your costs?
• Do you include overheads in grant applications?
• What about the time invested in fundraising?
Understand:
• Full Cost
• Marginal Cost
1. Calculate
direct costs
2. Calculate
overheads
3. Allocate
overheads to
project and
central
functions
FCR Six Step Process
4. Allocate central
function costs.
5. Allocate
governance and
strategic costs.
6. Allocate
fundraising costs
FCR Six Step Process – (Handout 5)
Total Costs of Project
TOTAL COSTS OF
PROJECT
£
Total Direct Costs 3,267
Premises and office 106
Director Costs 4,209
Support Costs 14,539
Gov and Strategic Dev 5,059
General Fundraising 6,660
33,840
Understanding Cost Drivers
Outputs and Outcomes• Outputs and outcomes were integral to our
case for support – they are integral to our
financial planning and fundraising
• Translating the project outputs and outcomes
into financial planning
• Costing outputs and outcomes
• Giving financial value to outcomes and outputs
• Linking the financial planning to the
organisational objectives
Group Exercise – Pooling budgets
Instructions:
With your own budget or management accounts to hand, in
pairs, walk your partner through how financial information is
presented in your service (5 minutes each).
Be ready to report back on their challenges in
understanding cost and what this might mean for
fundraising.
Have we covered the basics?
2. Assessing the Alternatives
What to start and what to stop?
Sometimes it can seem like we have too many choices.
You need to work out:
Your return: what realistically each choice could bring.
Your investment: what that choice would cost you.
‘Make, buy, share, divest’
Some of the alternatives
• Efficiency savings and cuts.
• Generating economies of scale or scope.
• Selling services.
• Fundraising.
• Spin-outs and other alternative models.
Not mutually exclusive, in reality we’ll all be using more
than one of these
Efficiency Savings and Cuts
Streamlining management and flattening hierarchies.
Simplifying or streamlining processes
Reduced opening hours.
When to use Volunteers – and when not to!
Stopping low value activities
Economies of Scale and Scope
Different forms of Collaboration
Scale - Delivering the same service together
Scope – Creating efficiencies with other types of services
Consider:
• Project design and implementation support.
• Legal support to help create shared services
agreements.
• Your effort in making it work!
• VAT
Handout 6 - Case Study – Keeping it
Together
East Sussex County Council (ESCC), Brighton and Hove Council (BHC) and
the University of Brighton Shared Service operate a shared archive service at
The Keep.
• Each partner needed better facilities and realised they would be better together in terms of delivering
outcomes and achieving economies of scale.
• At The Keep, visitor services are integrated, whereas in back office there are three separate
collections stored together but managed separately. The public collections interface is integrated.
Outreach and Learning are managed and delivered both separately and together.
• ESCC runs the building and is the budget holder for the shared service. There is a revenue budget for
The Keep as well as individual service budgets. The financial agreement is based on population for the
councils and for the University on its proportion of holdings.
• The shared service has enabled a much bigger and better service through the new building for the
same budget. Elizabeth Hughes, County Archivist, points to a range of other tangible benefits: "We
have a pool of staff with a much greater range of skills. We have more clout when applying for funds
together, and our profile has been raised with different audience groups."
• The challenges of the differing pace and process of decision-making are real, as is the web of legal
agreements and protocols needed: “Don't underestimate the management time involved in supporting
the governance and operation of the shared service." She adds: “You need to be aware of the
asymmetry of future risks to partners and plan to meet these challenges together."
Selling Services
Understand any restrictions on your commercial activities
whether in LA/charity or HEI Eg.
• Charge for services to recover costs
• Profit-making through a trading subsidiary
• Corporate policies on fees and charges
• Routine services
• Research
• IPR
• Sponsorship income
Selling Services
Things to consider:
• Your effort in co-ordinating this work.
• The efforts of your staff.
• The cost of handling cash and card payments and
providing invoices.
• Any new technology needed.
• The cost of marketing materials.
Handout 7 Case Study – Norfolk
Record Office
Idea generation = income generation
Brainstorm Rules
• Anything goes
• No idea is a bad idea
• Every idea is equally important and
valid
• Think as broadly and wildly as possible
• It’s all about quantity not quality at this
stage
• Stay on topic
Fundraising & Financial Planning
Separating Rhetoric and Reality
• Assessing your funding drivers
• Understanding your local funding market
• Evaluating your readiness for fundraising
• Considering different models for fundraising
How do you Compare?
Do you spend much more on some activities than do
other councils?
Do they raise more income than you?
Are your costs already much lower than the norm?
Tools to use
• Take part in the CIPFA stats or SCONUL benchmarking
exercises
• Find other archive services to compare with
• Conduct a simple activity-based costing comparison
together.
Being clear about your plans
The right plan for the right job.
Is it for a development trust or income generation?
Where does your fundraising strategy fit in?
Will the narrative give confidence to your stakeholders?
Stages of a Business Case
Business Case 5 Stage Model
Strategic Case
Economic Case
Commercial Case
Financial Case
Management Case
Handout 8 – Gloucestershire Archives
Group Exercise – Developing a plan
Instructions:
1.Working in groups of 4 discuss and choose from among
your group 1 organisational plan to work on.
2.Work through the 5 stages of the business case you might
prepare.
3.Be ready to report back the steps you would need to
address and the analysis you would conduct.
4. Developing Our Individual Plan
What tools and resources can we use?
• Make Friends with your Accountant
• Learning the basics
• Building your networks
• TNA Guidance ‘In A Spin’
• Fundraising for Archives Training
Individual Exercise -
Handout 9 – Developing My Own Plan
Instructions: Spend 10 minutes thinking about how you will:
• Develop your own skills
• Your team skills
• Put your plan into action
• Where you need to go for help
Have we covered everything?
• Understand and articulate our own organisational funding
model and benchmark its position relative to the sector.
• Understand how to analyse our cost base and productivity
and how this informs financial planning and options.
• Engage with key decision makers to influence the
outcome of governance reviews, options appraisals and
commissioning.
• Know where to go for best practice guidance from leaders
in the sector and case studies of transformation.
• Take forward a development plan for improving financial
resilience.
Fundraising for Archives