the community radio toolkit

From recently, anyone needing evidence on issues concerning the voluntary sector can search the new Third Sector Knowledge Portal.

The Portal was launched recently by the Third Sector Research Centre, at an event held at the British Library to showcase the first three years of work by the Centre. It has been built in partnership with the British Library and funded by £200,000 from the Big Lottery Fund. It can be found at: http://www.tsrc.ac.uk.

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There are two principle strands to financial management:

• Budget management i.e. making sure that your expenditure matches your budget projections;
• Projecting income and expenditure. Your Ofcom application form (see Chapter 3) will have spelled out in broad terms where you expect to find the money it will take to run your station.

Budget management

You need to ensure that the money you are spending at the station, day-by-day and month-by-month, is no more than your budgeted amounts. Your station will have dozens of different budget lines, for both core expenditure items (like rent and phone) and expenditure that is specific to a particular project (like the cost of workshop trainers or leaflets to publicise a particular event), and you must make sure that every penny that is spent is recorded and allocated to a budget.

The opportunities community radio offer are so extensive that staff members and volunteers will always be coming up with brilliant ideas which ‘won’t cost much.’ They soon add up to a large hole in station funding. The one question that station managers need to ask their colleagues more than any other is… ‘and who will pay for that?’ To keep track of what money is being spent against which budgets, you should use a computerised accountancy package. It is possible to keep records of income and expenditure using simple spreadsheets, but as you expand this will become unduly complicated and inflexible and will invite confusion and errors. The money and time required to learn a basic computerised system is an excellent investment. QuickBooks is one industry standard that your accountant will understand and which is also very easy for a non-finance expert to use.

Using a system such as QuickBooks, every item of expenditure is given an expenditure account and a project class. So you might have bought some folders for your training project, which you would code on your accounting system as Stationery/Training, or paid a volunteer for the refugee project for the cost of their child care, which you would code as Child Care/Refugee. Some costs might be shared between projects, so if the training and refugee projects shared an office, for example, the cost of the office rent would be split between them when entered on your accounting system. Then, almost at the touch of a button, your accounting system can produce expenditure reports telling you how much a particular project has spent and on what, or how much you’ve spent in total on a particular item, like stationery, across all of your projects. As well as being invaluable for internal monitoring purposes and for producing accounts easily at the end of each year, funders are also very fond of expenditure reports, so the easier they are to produce, the better.

Both your funders and your accountant like to see that a receipt or invoice has been filed against every, that’s every expense. If ever you think this is onerous, summon the mental image of a steely eyed auditor from Government Office descending on you and asking to see your audit trail – it will happen to you. Before you ‘go live’, ask your accountant to help you set up a basic system to help you do this. They really shouldn’t charge you (much) for this as it will make their job so much easier when they come to do your books. Tell them it’s a good will gesture as we’ve heard some accountants actually have this in their vocabulary.

Another essential tip for good budget management is to make sure that you know exactly what money you have spent, even if the invoice hasn’t arrived yet.

It isn’t at all unusual for an invoice from a supplier to go missing, or for a freelancer to forget to invoice you for months. And if you don’t notice that you haven’t paid for these things, you might decide to use your apparent under-spend on buying something else that you actually couldn’t really afford. So keep a list of any items or services that have been ordered or commissioned, and check them off as you pay for them. In this respect, you might want to operate a central ordering system, or delegate the ordering of regular supplies to just one person. In a similar vein, staff should be encouraged to submit regular expenses claims. In terms of your budget management, it really isn’t very helpful to get expenses claims going back a year or more and adding up to possibly hundreds of pounds (really, it can happen, are we paying our staff too much?) As well as the difficulty this causes with your budgeting, you might also have submitted the final expenditure claim for the project concerned.

Strange though it may seem, budget management often involves ensuring that you spend enough and not too little money. Most local authority grants, for example, must be spent by a particular date, usually the end of their financial year (the end of March), and this money absolutely cannot be carried forward to be spent in the next financial year. So if you are in receipt of such a grant, you must spend the money by the date specified. The rules on what constitutes spending money vary – in some cases, an invoice indicating that the activity took place before the cut off date will suffice, in others you will have to provide a bank statement to prove that you received the invoice, wrote the cheque and that the cheque cleared your account by the required date. If you don’t spend a time-limited grant in time, your local council will most definitely not be happy to have the money returned to them, since they will then have to return the money to central Government, and will be in danger of having their allocation reduced in future years.

In terms of sticking to the budgets that you set yourself, most grant funders will insist that you spend their money on the items that you detailed in your grant application, sometimes to a high degree of accuracy e.g. allowing no more than 10% divergence from the figures in your original budget. But with some other funding (e.g. Service Level Agreements – see Chapter **) the funders couldn’t care less what you spend their money on so long as you deliver their outputs. The result of the latter is that if you happen to come in under budget, any surplus is yours to use elsewhere on the station (more Lapsang Souchong perhaps).

You will often find that local authorities and other mainstream agencies are looking for ways of spending money towards the end of a financial period, and you may well be able to help them to do this. But think carefully before you accept such grants. £20,000 to run a community outreach project may be very welcome, but if you then have to complete the project in 2 weeks, you will find that spending money can be very hard work.

What’s in your budget

But exactly how much will it all cost to run our station, we can hear you asking. Well, obviously, that depends – on how many staff you employ, on how big and posh your premises are, on how many of your volunteers you pay child care expenses to etc. As a very rough guide, we currently reckon on about £100,000 a year to run one community station. Perhaps more usefully, take a look at Table 6.01 which lists the items that you need to consider including in your budget (and the approximate amount that we spend on each item at one station each year).

Broadcast licences

Two items that your budget must contain are the fees for your PRS and PPL licences. PRS and PPL are music copyright agencies which look after royalties for musicians and record labels respectively, and you must obtain a PRS licence and a PPL licence if your station plays any music. For RSL broadcasts, these licences cost in the region of £40 each per day, but thankfully these fees were  greatly reduced for stations with Access Radio pilot licences. The basic charge to the Access stations was £500 per annum per licence to play as much music as they liked, as long as they didn’t make big profits in the year (do your sums, that’s quite a discount!) It is hoped that the same scale of fees will continue for community stations with permanent licences, and the Community Media Association is in the process of negotiating a deal which will hopefully offer fair recognition of community radio’s small size and limited resources.

TABLE 6.01

Example: Annual community radio station budget

The copyright agencies are still deciding the appropriate level of fees for community radio stations that simulcast their output on the web. At the time of writing, the CMA has requested that a similar fee is charged as for the analogue licence; PPL have provisionally agreed, and we would expect PRS to follow suit. In the meantime, the official advice to community radio simulcasters is to alert PRS and PPL to your activities until a formal request for payment is made. Bear in mind however that it’s possible that the agencies will back-date their request for a licence fee – not good for your budget management. Keep a close eye on the Toolkit website and www.commedia.org.uk for updates.

Full-time community radio stations also have to pay two licence fees to Ofcom. The first of these is an annual Broadcasting Act licence fee, which is £600 per year plus a percentage of your commercial revenue. Since the percentage amount due is offset against the £600, you are actually very unlikely to have to pay any more than this. Note that the Broadcast Act licence fees for all radio broadcasters are currently being reviewed so the amount may change in the near future. The second licence fee payable to Ofcom is a Wireless Telegraphy Act (WTA) licence fee. The cost of this licence currently ranges from £226 to £509 per annum depending on the population size in your broadcast area and whether you are broadcasting on FM or AM.

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Community radio is a greedy beast. However many resources – financial, material or human – you may have at your disposal, a community radio project will swallow them up, burp and ask for seconds.

Managing on low resources

A 24 hour commercial radio station might typically employ 30-40 full-time staff. A community station is attempting to produce a similar volume of output with many more broadcasters to manage, not to mention a host of additional social and pastoral responsibilities, with perhaps 10% of that number of paid staff. The demands for equipment, facilities and marketing resources are endless. What’s more, community outreach work, education, training, volunteer development and other social gainrelated activities tend to be self-generating – the better you are at doing them, the more people will seek your help. Sooner or later you have to draw a line under your spending. The question is how you can get the best results from the least expense.

Look at the big picture

While good management of a well-designed project can sometimes generate miraculous results from minimal resources, it is important that you give yourself a realistic chance. The overwhelming majority of station costs are entirely predictable. Hypothetically, if a station has an annual turnover of
£100,000, as much as £95,000 of the costs may be predicted in advance.

Expenditure can be categorised as ‘fixed’ or ‘variable’:

• Fixed costs – whatever you cannot change: rent, business rates, insurance etc.;
• Variable costs – some bills (especially telephone), emergency repairs, special events, stationery, marketing etc.

Staff costs are fixed when your employees are on permanent contracts, but will be variable if you have staff as freelancers or on temporary contracts. Like your expenditure, your income can also be described in different ways:

• General income – money which can be spent as you see fit. This may come from general fundraising, business activities (e.g. selling advertising or services) or general donations;
• Core funding – money you are given to keep your station running to cover the basic costs of staff salaries, premises etc.;
• Project funding – money which is provided for a particular purpose, such as running a community drama project or conducting outreach work with a specific section of the population.

While the vast bulk of your station income will go on staff salaries and fixed costs, it is often the apparently trivial budgets that cause most anguish. When a studio CD player breaks and there isn’t £100 spare to repair it, the stress and inconvenience caused can be out of all proportion to the money involved. We will return shortly to the larger picture of budget management, but first we’ll consider ways to keep your variable costs down.

Look after the pennies …

With several over-worked members of staff and dozens of enthusiastic volunteers coming and going at your station, it is incredibly easy for the petty cash supply to be eaten up, whether literally in the shape of chocolate-covered Hob Nobs, or metaphorically with a ready supply of blank minidiscs or stamps. At Radio Regen we try to avoid the use of petty cash altogether – maybe it’s just us but it never adds up at the end, and the time and aggro expended in trying to track down that missing receipt for teabags is just not worth the sums involved. Instead we use an expenses system which is pump primed by giving an expenses advance to those staff who buy a lot of teabags.

Someone at the station needs to make themselves deeply unpopular with their unashamed stinginess. While you really should supply your volunteers with a sack of teabags from the cash and carry, if they want to drink Lapsang Souchong they can bring their own. Keep an eye on the itemised bills and try to instil a culture of cost-awareness at the station – small details such as switching off lights and equipment in empty rooms or not filling the kettle to the top every time it is boiled will actually make a noticeable difference to the year’s electricity bills and will be a constant reminder to everyone at the station that money is tight (plus maybe saving an inch or two of the polar ice cap). There’s nothing as sobering as explaining that replacement ‘pop’ shields can’t be bought because the station spent too much on bottled water.

Make sure that all volunteers understand that if equipment is lost or damaged, it cannot always be replaced. Focus people’s minds on the need to treat every microphone and every machine with the utmost care and respect. And keep a very tight eye on your phone bill. This is one expense that can suddenly rocket if someone at the station – whether thoughtlessly or selfishly – makes some long calls to a mobile phone or overseas (our record at Radio Regen to date is a £54 call made to the Congo). You may want to consider blocking calls to such numbers on the station phone, if you can.

Never pay for anything you can get for free

One of the great strengths of community radio is that people want to help. A station manager needs to be utterly shameless in asking for favours, donations or freebies – just remember “It’s for charidee!” If your team of volunteers includes a joiner and you have a broken door, just ask (see Voxbox 6.01). If the volunteer is happy to use their skills to help you out, that’s fantastic. But always be gracious with refusals – it isn’t fair to pressurise someone into working for you for nothing, even if they do get a show once a month.

Check whether there is any form of LETS (Local Exchange Trading Scheme) operating in your area. These schemes allow individuals and groups to trade skills and services for tokens instead of cash, and as a radio station, you have a lot to offer. You could, for example, run a regular slot about services needed and offered on the scheme on your community programmes, in return for an agreed number of tokens which could be traded in for maintenance work or other basic favours.

Some newcomers to radio imagine that buying records and CDs is a major cost for radio stations. In fact there should be no need to spend a single penny on them. Record companies employ publicists (either on their own payroll or contracted specialists, called ‘pluggers’ in the trade) specifically to send new releases to radio stations. At present, some record labels are more willing than others to include community radio stations on their mail-out of new music. Some are yet to be convinced that a community station is anything more than a hobby project or pirate. As the sector grows in volume and profile we would hope this should change. One significant development is the arrival of free download services specifically aimed at the radio industry such as www.musicpointuk.com, which allow record labels to get their music to you without even the cost of postage. Small independent and specialist labels might not routinely send out promotional music, but they also tend to be flexible if your station is offering to publicise their music for free. As ever, if you don’t ask you don’t get.

VOXBOX 6.01

“The building we are in now was an old boatshed that we renovated. When we first came in there were no partitions, no doors, no floorboards in some places. It was horrendous. We had a lot of help – many of our volunteers are tradesmen, plumbers, joiners and so on. They helped us, and we give them some advertising, so it benefits them as well as us.” Kathleen MacIver, Station Co-ordinator, Isles FM, Stornoway

Never do something for free if you can get paid

With your place at the very heart of your community, you will regularly be approached by other groups, agencies, businesses, charities etc. wanting you to do things for them, whether it’s broadcast a message, publicise an event, or borrow your facilities. There is always a temptation to say yes, especially to well-intentioned community projects or charities. But don’t assume that these groups are completely cash-strapped. Their staff have probably read a similar book to this one and are following the maxim above: ‘never pay for anything you can get for free.’ Don’t be embarrassed to ask them if they have a budget available for publicity or hire of facilities. If they have, then you are entitled to your share. If they haven’t, you may well end up agreeing as a favour anyway, but try to get an assurance that the favour will be returned in some way at a later date. If you are offering a service to another group you may wish to try a pilot scheme first for a minimal or zero charge, but be clear what is being offered and for how long. If the arrangement is to continue, then
you are entitled to be asking for payment.

Asking for payment from like-minded groups shouldn’t trouble you – they can always say no, and you’ll be no good to them if you go belly up by being too generous with your services. Even if nothing comes back to you, the request is a way of placing value on the services you offer.

Help each other out …

The nature of a community radio station is that everyone tends to muck in together. If you save money by not hiring a cleaner, it is incumbent on everyone to do some cleaning occasionally (Voxbox 6.02). More seriously, a large number of the tasks required to run a station fall outside the remit of any one particular member of staff. The words ‘someone else’s problem’ or ‘more than my job’s worth’ should never be uttered at a community radio station, everyone needs to support everyone else and one person’s problem is everyone’s problem.

VOXBOX 6.02

“A woman from a funding agency visited the station for a meeting early one morning, and when she arrived I was doing the hoovering. My colleague introduced us and we chatted for a bit. Then she asked me what my job was and I told her ‘station manager’. She looked really puzzled, and asked ‘so why are you doing the hoovering?’ I answered, ‘because the floor was dirty.’ Alex Green, Station Manager, ALL FM, Manchester

… but not too much

It is very easy for staff members to get sucked into a tornado of minor tasks – nailing down loose carpets, hoovering (!), settling personal squabbles, undertaking lengthy face-to-face support with troubled volunteers etc. It is crucial that paid staff remember what it is they are being paid to do. Your station will thrive or struggle according to your performance in your key tasks. If an employee is being paid to conduct outreach work and liaison with other community groups, then that is what he should spend his time doing. If he can do that well, and still have time left over to help a volunteer make a jingle then so much the better, but the work must be prioritised.

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Following our recent ‘spotight on’ the use of social media to promote your website, you may find the Media Helping Media online learning modules covering Twitter of interest. A permanent link to the full training series can be found in the training section of ‘shared resources’.

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