Sharing costs

Sharing costs (apportionment) is important when:

  • your group has more than one funder and needs to fairly share costs between them
  • your group has more than one activity and needs to split costs between them – this is known as “cost centres”
  • you are calculating full cost recovery 

Mistakes to avoid! Costs should never be apportioned using:

  • Guesswork or notional figures (e.g. “a 10% management fee”)
  • Turnover (e.g. the relative size of each project or grant)
  • Numbers of staff or participants
  • Numbers of projects (e.g. simply splitting costs equally three ways between three projects)

Why is sharing out costs important?

You must apportion costs properly to:

  • ensure all costs, especially overheads (core costs), are adequately funded. Core costs are the central running costs of your organisation, including administration, management and general running costs such rent, rates, heat, light, stationery, etc.  Apportionment used in this way is known as Full Cost Recovery.
  • avoid ‘double funding’ (i.e. having things paid for more than once).
  • ensure that costs are fairly distributed between those who should be paying for them. (full cost recovery).

A cost can only be apportioned to a funder if it is eligible under their rules and included in your agreement with them. For example, if a funder does not allow overheads, then they cannot be apportioned to them and must be funded some other way. 

What are overheads (core costs?)

These are costs which apply to the whole organisation and which each activity could be reasonably expected to contribute towards. These might include:

Building costs such as:

  • rent
  • rates
  • utility bills (electricity, gas, water, etc)
  • insurance
  • repairs and maintenance
  • care taking and cleaning

Admin and management costs such as:

  • management committee expenses
  • managers’ salaries
  • admin workers’ salaries
  • telephone bills
  • printing and copying costs
  • postage
  • audit and finance costs
  • stationery and office supplies

How are costs apportioned?

Costs must be apportioned using methods that are fair and reasonable.  There are several generally accepted methods of apportioning costs that you could use. The more complicated your funding situation, the more complicated sharing costs can become.

Staff time 

Uses:  Costs are apportioned based on staff hours. Useful for most costs.

What you need to do: Staff must keep detailed timesheets.

Space used

Uses: Costs are apportioned based on the space an activity uses. Useful for building related costs such as rent, utility  bills, cleaning and repair costs, rates, etc.

What you need to do: Records must be kept about the space used by different activities.

Actual usage

Uses: Measuring and recording actual usage of something. Useful if other methods are not producing realistic results.

What you need to do: Records of usage would need to be kept. For example, photocopier records generated by codes for each project.


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