In our experience it is practically impossible for a community radio station to have all of its annual core funding in place at the start of each financial year – never mind for the next five years. Ofcom don’t expect it, and neither should your board. Obtaining funding tends to be an ongoing process, with bits of money arriving here and there through projects, grants, fund-raising and various windfalls.
To prevent this leading to serious financial problems, the person in charge of your finances needs to be able to identify how fully-funded the station is today, and how under-funded it will be in several months time. Good financial planning will enable you to see budget shortfalls coming long before they arrive, giving you plenty of time to look for alternative streams. So if you are looking ahead over a full year and still have a shortfall of perhaps 25% of your turnover, you needn’t panic. On the other hand, if you are looking only three months ahead and cannot see how staff wages are going to be paid, then a crisis meeting to develop an action plan is probably in order – if not full blown panic. This is far preferable to suddenly finding your cheques bouncing.
Matching resources to tasks
You can get the most out of your resources with a well-motivated (but unstressed) team of staff and volunteers and a careful eye on the purse strings. But that should not detract from the need to have a well-financed project with resources that are (at least nearly) adequate for the tasks you have set yourselves. Your initial Ofcom licence application should be realistic about what you hope to achieve and how it will be funded, and that includes stating what positions you intend to fill.
The premises you choose can make a difference to your core costs, of course – if you can find a community centre which can provide enough space to host your station for a minimal rent then you give yourself a head start, financially. But of all your variable expenditure, staff salaries are the most flexible. If you find yourself short of £15,000 in the coming year and cannot find funding to cover it, the only way you can realistically save that sort of money is with a redundancy. However that would inevitably impact on the ability of the station to match objectives set by Ofcom or your funding agencies. It’s also a poor way to run any form of enterprise, if staff do not feel their position is secure they are unlikely to show the dedication, commitment and motivation you will need from them. And besides, the law ensures that in most cases it’s pretty difficult for an employer to simply click their fingers and dismiss employees.
The secret then, is to ensure that you can find enough resources to do what you have promised to do. More details on finding these resources in Chapters 13, 14 and 15, but a word first on the recurring theme of core funding.
Finding core funding
Core funding is the money you will need to keep your station running – salaries, rent, bills etc. It is obviously essential to any community radio station. As we explain later, some funding agencies are reluctant to pay core costs, and only offer ‘project funding’ to pay for specific activities or functions.
When you are getting your funding in place, if you don’t include claims for core funding you could find yourself awash with cash to perform particular functions, but without a studio or station to work in. Some community stations have a parent group or charity (such as an existing community centre) which can guarantee core funding. They are lucky (if less than fully independent). If your core funding is in place, or you have a realistic strategy to find it, you are well on the way to running a successful community radio station. If you don’t you could find yourself on a rocky path.
When applying for grants from funding agencies, you should always seek core funding. This will probably mean an application budget which includes part of the cost of your core administrator, manager, technician and premises – which is complicated, but necessary. Say funding is available for a project to broadcast health advice to young mothers. A part-time outreach worker’s salary is included, plus a budget for materials. But that parttime worker has to be supervised, taking up the time of a line manager. That should also be included in the budget. The project takes over the training room for two hours a week, meaning it can’t be used for other – possibly lucrative – sessions. The engineer has to maintain the studio when things go wrong, eating into his time and workload. And so on, across the station.
Even a small project might take up a few hours a week of every physical resource and every member of staff, so the application should include these costs as well as the ‘headline’ project worker. If funders refuse to comply with such reasonable requests, you should seriously consider declining the funding. The project could end up costing you more than it is worth. Some funders, such as the Big Lottery Fund, are now talking along these lines (calling it Full Cost Retrieval) but at the time of writing their sister organisation Heritage Lottery Fund point blank refuses such budget lines in some of their applications.
A community radio group might consider itself lucky if it finds 50% of its annual income from a single source (the maximum allowed by Ofcom). However there are advantages to several smaller funding streams running simultaneously – funding would usually be more staggered, which helps cash flow, and if one source dries up, it is unlikely to close the station. Multiple funding streams also help your independence should a major funder seek to exercise undue influence.
Cash flow and overdrafts
Cash flow is one of the biggest headaches for any community project. It is reasonably straightforward to calculate how great your expenses will be over the next financial year and also that you can raise enough money to cover it all. But if the money isn’t going to reach your bank account for another six months, what will you do to pay staff wages next week?
The solution is to plan not only how much money you will receive, but when you will receive it. The secret of healthy cash flow is getting the money in before it goes out. Unfortunately that is often easier said than done. Payments from funders and partners can fail to arrive when expected, or you may only secure some of your funding at the last minute. You will inevitably end up spending money for project X on staff for project Y – this is not a problem as long as you know that project Y will receive its funding at some point so that the books balance at the end of the accounting period for each project. The traditional remedy for cash flow problems is an overdraft at the bank. Unfortunately many banks – even those which make ethical and social responsibility claims – will flatly refuse to offer such facilities to community and voluntary groups. Sometimes even waving a promissory letter from a major funding agency will not budge them. It is worth bearing this in mind when first opening your bank account. If you go to a bank manager offering him an account with a £100,000 annual turnover, you are negotiating from a position of strength. Insist upon overdraft facilities as a condition of opening the account, and you will often find banks are more flexible than they first claim. Another option is to talk to a major partner in your station, such as the local council or college, and see if they might advance you your running costs against guaranteed grant income. It costs them nothing and it enables them to have a role in facilitating a vital service for their community. You’ll never know if you don’t ask and they might even say yes – both Manchester City Council and Manchester College of Arts and Technology have performed this vital role for Radio Regen at times of need (thank you very much!)
Monitoring and evaluation
When running a community radio station, it is not enough to make great improvements to your community and the lives of your volunteers. You have to be able to prove you have made those improvements – to your funders, to Ofcom, and not least to yourselves. The way you do this is with project monitoring (recording exactly what is done or ‘what we did’) and evaluation (making judgements about the information recorded or ‘was it any good?’)
It’s very easy to get caught up in the exhilarating side of community radio – making programmes, training volunteers, working with dynamic community groups. But unless you make a good job of the rather dry business of recording your activities, your funding will soon dry up and it will count for nothing. If you approach it in a calm, organised fashion, it need not be a painful process.
There are two areas which funders will want you to account for yourself:
- Spending – have you spent the money as you promised you would?
- Performance – have you achieved what you said you would?
In most cases your accounting system should take care of the former. Your annual audit of accounts will require you to keep a paper trail to record every item of spending, and each of those should have been apportioned clearly to one budget. It is your performance monitoring that is likely to prove more problematic. Typically, a community radio station will need to be able to answer the following questions to a variety of funders:
- How many individual volunteers have used the station and how much?
- How many volunteers have been through training schemes, and which ones, with what duration and with what results?
- How many volunteers and trainees belong to specifically targeted sections of the community (e.g. with disabilities, from particular deprived wards, from specific ethnic groups etc)?
- How many (and which) community groups have been helped?
- How many other visitors have you had to your station, and to what purpose?
- How many local businesses have been helped and how?
- How many schools have participated and how?
- How many jobs have been created/safe-guarded?
Strangely, at Radio Regen, in six years of community radio monitoring for dozens of different funders, we have never once been asked to report on our broadcast output. That is perhaps a useful reminder of the relative importance of community and radio activities, at least as far as funders are concerned.
Plan ahead (or find out what they need to know in good time)
Before you even accept a grant, you should read the small print. What information will the funder need back from you? Some want only quite general statistics and outcome measures, others will ask for extensive detail. The amount of monitoring required often shows little correlation to the size of the grant involved, and in extreme cases you may judge that a grant of a few hundred pounds is not worth it if you have to report back every volunteer’s height in centimetres and their grandmother’s maiden name.
Assuming you’ve taken the cash, begin collecting the information you need at the very outset, and continue as you go. Much of it may already be available, since ideally you should collect all the information you might reasonably need about your volunteers when they first sign up – age, sex, employment status or occupation, education, disability, illness and access information, ethnic origin and so on. You should then require volunteers to sign in and record the nature of their activity each time they visit the station. Just that simple system will cover many of your monitoring needs.
However you organise it, try to ensure that volunteers and partners aren’t being asked for the same information repeatedly on several different forms – if for no other reason than that they will become much more reluctant to fill in any of them at all. It is already hard enough getting many volunteers to sign an attendance sheet. There is also the vexed question of letting the volunteers know why you need the information without giving the impression that you are being paid as a result of their work making radio on the station. Far fetched? It’s happened to us. You need to make it clear to volunteers that without the information you are requesting, the station closes – providing the information should be second nature to them.
The ideal would be a single data collection questionnaire which volunteers could complete once and then update with every activity session and at the completion of the project. In practice, at Radio Regen we have yet to design such a form satisfactorily, and we have the piles of paper to prove it.
Many grants will have their own unique monitoring conditions attached. Be quite clear what these are from the outset and get them agreed in writing. There is nothing worse than having to track back through six months of station activities because a funder has suddenly told you (or you have suddenly noticed) that they need to know whether a volunteer was supervised by a trainer for 25% or 50% of their studio time and you hadn’t been recording that information. We cannot stress enough how vital it is to be clear exactly what monitoring you will need to conduct before you begin a project. It can be just about impossible to do it retrospectively.
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The full pdf report can be accessed at the Ofcom page. What follows is the executive summary published this morning (18/11/10).
