Benefits of full cost recovery

• Accurate - funders get true reflection of the cost of the project
• Transparent - provide clear, defensible cost allocation method
• Efficient - reduces time spent juggling figures
• Appropriate - funders pay for all and only the overheads that support their project
• Sustainable - funded organisations survive; projects continue

There are many benefits for organisations in understanding full cost recovery. It enables an organisation to appreciate the exact amount of funding required and more importantly provides a clear idea of how a project, activity or service will impact on the financial sustainability of an organisation. Good financial practice will without doubt lead to more informed planning and decision making and create a more secure future.

Full cost recovery can give organsiations a better understanding in most funding situations:

• When bidding for grants organsiations must seek to recover all costs
• In contracts the full cost of delivering a service must be negotiated
• For trading, pricing for products or services must reflect the true cost of producing or delivering those goods
• Identifying and plugging gaps in fundraising

It is important to note that using the template does not replace funding negotiations, it simply helps inform them.