Heading for an under/overspend? Keep your funders informed

Sarah Morland
Article date
6 May 2016
Primary interest
Funding and Fundraising

When you apply for a grant, you need a detailed plan of the ” when, what and where” etc. for how you will use the funds to meet the needs of the people and communities you support. Unexpected external or internal factors can impact on your ability to deliver that plan.  For example, a key staff member or volunteer leaves, reducing your capacity until you can recruit a replacement. Or the cost of delivery goes up due to increased utility bills. Or you don’t get the referrals you had expected.

As a follow-up to the Wellbeing Forum at the end of April, I asked the three funders, Big Lottery, Reading Borough Council and Berkshire West Clinical Commissioning Groups for advice about how grant recipients should manage the possibility of a projected underspend or overspend on their grant.

Berkshire West CCGs‘   Partnership Development Fund has a half-year monitoring report which asks: “Are you on track with your intended project plan? We know that all projects can experience problems so please tell us about what has been successful and what you have found difficult.”

Rhiannon Stocking-Williams for the Berkshire West CCGs says:  “I would imagine that most funders are understanding when there is a reasonable explanation for how an underspend has occurred, and would expect a recipient to alert them in time and propose a plan to use it up – within the grant year.”

Reading Borough Council‘s grants under the Narrowing the Gap Commissioning process asks “for quarterly monitoring reports (not necessarily followed by a monitoring meeting – usually not) so would ask for any significant variation from expected expenditure to be flagged to us within those reports.” (Janette Searle)

Kate Sawdy from the Big Lottery advises “the first thing they should do is pick up the phone and discuss the situation with their managing Funding Officer rather than waiting until the next monitoring report. Therefore the key message is to contact your Funding Officer as soon as possible re any divergence from the agreed budget. We will want to understand how the variance has come about but will then work with a grantholder to find the best solution to address this.”

“There is a section in our ‘Standard Guide to your Grant’ which gives the formal guidance on what grantholders should do in relation to any changes to the grant, including the budget. This currently includes completing a ‘Changes to your Grant’ form.”

The key message is keep your funders informed if you anticipate any changes in your project plan which could lead to under or overspend of your budget. Together you can agree the best way forward.