How do I include overheads and core costs in a funding application?

England and Wales: This page sets out the position in full. Scotland: the same position, with no difference in principle — almost every funder in the table below is UK-wide, and the one that is not, Lloyds Bank Foundation, covers England and Wales only. Northern Ireland: the same again, with the same single exception: Lloyds Bank Foundation does not cover Northern Ireland.

Which funders pay core costs?

Some UK funders pay core costs and some do not. Sector shorthand gets both halves wrong — “funders never pay core costs”, “everyone funds core costs now”. For the treasurer and whoever writes the bid, the differences are large enough to decide whether a project is worth applying for. If you have not yet mapped your income and found your concentration risk, start there: it shows which sources carry the running costs now.

The table shows each major funder’s published position on core and running costs.

Read the Wolfson row again, because it is the one that catches people out. The funder requires that the money go on capital. It names overheads, maintenance, salaries, running costs, VAT and professional fees as things it does not pay for. An application to Wolfson with an overhead line in the budget is asking for something the funder has already said no to in print.

Does the National Lottery Community Fund pay core costs?

Yes. The National Lottery Community Fund is the most important funder for small charities in the UK, and its own programme page answers the question directly:

"We can fund day-to-day running costs. These are sometimes called 'core costs' or 'fixed costs'." Examples given include core salaries, rent, utility bills and equipment.

So the fund requires no special framing for running costs. They are eligible, and they can be named as what they are.

The page checked was the England flagship programme. The fund repeats the same “what you can spend the money on” page for each of its other programmes. So check the one you are applying to rather than assuming it reads the same.

What a funder’s core-cost category excludes

Where a funder does offer core funding, read what sits underneath the heading. Garfield Weston has a dedicated core cost category, and its own terms still exclude a list of things:

but core grants exclude endowment appeals, reserve-building, loan repayment, feasibility studies, redundancies and insolvency costs. Regular Grants under £100,000; Major Grants at or above.

The funder requires, in other words, that “core costs” means running the charity. It does not mean rebuilding its balance sheet, paying down a loan, or paying for redundancies. That is a normal position, and it is not obvious from the category name alone.

Two more things to read rather than assume. Tudor Trust does fund core costs, but it has no written application route at all, so the category is only reachable by invitation. Comic Relief’s position is in transition and it has no live funding opportunities to apply to.

How do you work out the full cost of a project?

Do the costing once, properly, and then test it against each funder. Doing it the other way round produces a budget shaped to a guess.

Core costs are the charity’s running costs as a whole — management, finance, premises, insurance, IT and governance — rather than the direct costs of one project. The method belongs to the money hub. Calculate your full cost recovery rate sets out the direct costs, the share of running costs and the written apportionment basis. That basis has to be the same one the accounts use.

Pricing the project at that total is full cost recovery, and the same total goes forward when you build the project budget. Where a funder will not pay part of it, you now know exactly how much of the project has to be paid for from elsewhere. That is a decision for the board, not a rounding error in the bid.

What is still not established about funder eligibility

Two narrow points remain open in the research and are recorded rather than guessed.

The eligibility list for the small-grants programme in Wales omits community benefit societies, and whether that is an exclusion or an omission was not settled. And two figures were not re-checked in the latest pass. One is the Wolfson Foundation’s minimum grant, which it does not publish. The other is the exact deadlines on the Heritage Fund’s larger programme.

One further warning from the same research is worth taking generally. The Wolfson Foundation’s own landing page carries a pause notice from 2020 that contradicts its live sub-pages. Check more than one page on a funder’s site before you conclude anything from it.

You now know what the project costs in full and which funders will pay for which part of it. The next step turns that into the argument for funding it: write your case for support.

Common mistake: assuming core costs are always fundable, or never fundable

Both halves of the sector’s shorthand are wrong, as the funder-by-funder table shows. One funder has a dedicated core-cost category, and another makes most of its grants unrestricted. A third funds capital only and names salaries and running costs as ineligible. Applying on the wrong assumption either strips a legitimate cost out of the budget or puts an ineligible one in.

Common mistake: treating “core costs funded” as unconditional

The category name suggests breadth, and the terms underneath it are narrower. Garfield Weston’s core grants still exclude endowment appeals, reserve-building, loan repayment, feasibility studies, redundancies and insolvency costs. Read the terms, not the heading.

Worked example

Saltmarsh Trust costs a new project and adds a share of its running costs. It apportions them by the floor area each activity occupies, the same basis its accounts already use.

The same budget then gets four different answers. Garfield Weston and Esmée Fairbairn would fund it in full, overhead line included. The Heritage Fund would fund a proportionate share of the overheads under full cost recovery. At Wolfson the overhead line is entirely ineligible, because that funder pays for capital and nothing else.

Nothing about the project changed. Saltmarsh’s decision is which funders can pay for the project. Where a funder will not cover the share, it must also decide where the rest comes from.