Good Practice & Guidance
« Back to overviewFinancing and funding a new City Farm. 2003
Financing and funding a new City Farm
Green Paper 012 – June 2003
Can a new city farm attract funding?
A well thought out and developed plan with significant local public support can attract substantial funding support. This is likely to be about a two-year process. Creating a multi-purpose city farm will greatly enhance the fund raising programme’s success.
The key to external fundraising
Your greatest asset is your enthusiastic members and supporters, who can honestly express your case for funding. Recruit experienced volunteer advisers who will help with difficult applications. Major fundraising is an important learning experience and what you learn will aid you in the financial management and operation of the city farm.
5 key R’s of Fundraising: Relationships, Resources, Research, Records and Reporting
Relationships
Where possible talk with potential funders prior to any application; try to persuade them to visit. Remember to keep your funders informed and develop a working relationship, (eg: reports, annual report, invitations to events, photographs, children's work, publicity where funder is included). Always spend money as agreed. If two funders provide the same money for the same programme, write back to one and seek agreement to use the money for another programme or purpose.
Resources
Fund Raising is hard work, time consuming and involves some costs: set aside the necessary time and resources. Over 75% of fundraising is preparation and research, 1% -3% is application and 10% -24% is monitoring and reporting back to funders.
Research
Thoroughly research potential funders prior to any application; a great deal of research information is readily available and the world wide web provides an important tool. Do not waste your or their time on inappropriate applications to the wrong bodies. Remember assessing, giving and monitoring grants and donations by donor bodies is also hard work.
Records
All monies and gifts are important: you must keep good records on all funders who you have or intend to apply too, so that anyone can see what has happened and what needs to happen.
Reporting
Make sure you keep funders informed of progress and account for all of their money spent. Many funders have their own reporting procedures and dead line dates. If anything is not going to plan inform the funder at the earliest possible moment.
What needs to be funded?
Feasibility study and pre-development costs
Building, infrastructure and landscaping costs
Operating the City Farm: Revenue costs (annual operational costs)
Feasibility study and pre-development costs
Public consultation
Consulting all sections of the community – Postal questionnaire; interviews, meetings, drop-ins ‘seeing is believing’ tours, data analysis, translation costs, working groups, consulting all sections of the community.
Public, private and social economy consultation
Including consultation with neighbouring boroughs and associated Organisations. Meetings, interviews, ‘seeing is believing’ tours, working groups,
Keeping people informed
Newsletter, information on existing website, meetings, drop-in sessions, activities, events & translation costs
Advice and support
Fees, out of pocket expenses, membership fees of relevant organisations, subscriptions
Recruiting, inducting and training
Induction & training of potential volunteers, MC members, for example: management activities, fund-raising, information dissemination, consulting and interviewing.
Volunteer/Working Group expenses
Travel, subsistence, childcare, facility hire, out of pocket expenses
Structure, land acquisition and negotiations
Registration, survey costs, legal costs, consultation and negotiation expenses
Design and design consultation Phase 1.
Architect and team fees, expenses, outline planning applications costs
Fund raising
Expenses, administration, advice and support costs
Business planning
Consultation, fees, expenses, reprographics
Co-ordination, monitoring & evaluating progress
Social auditing follow-up, administration and reporting costs
(construct your own budget)
Building, infrastructure and landscaping costs
Make sure that in raising capital funding to develop the City Farm you allow for a reasonable contingency to cover any increases in building costs. Otherwise you tend to cut costs, which often involves factors that increase your operational costs in the future, eg insulation levels, energy control systems, quality of materials and finishes. Any contingency funds remaining after the building phase can become the basis of your maintenance reserve, (see operational costs).
What also might need to be funded on a chosen site
A development on Contaminated Land:
If the proposed site for a city farm was known, or suspected of being contaminated, the planning application would have to include a site assessment, and remedial measures agreed with the council. Costs of remediation of contamination have not been included in outline capital budget costs.
Potential Archaeology Site
A development on a site of archaeological interest can also lead to constraints, delays and costs. The costs of an archaeological site investigation and potential dig.
Nature and conservation survey and plan
If the proposed site has existing habitats and nature interest, carry out a survey and incorporate existing ecology into the City Farm’s design
What other capital costs may need to be funded
Renewable energy generation
Costs of a feasibility study by energy specialist, which could be included in an architect’s brief.
The capital costs, (eg photovoltaic roof and system, may be grant aided by the EU, your national, regional or local government.
External infrastructure
Costs of for example bringing a roadway to the site and/or electricity, gas, sewers or mains water.
Facilities available and rules and regulations governing them will vary from country to country.
Operating the City Farm: Revenue costs (annual operational costs)
Establishment costs – local and /or national taxes, rent, water and waste disposal, heat, light and power, insurances
Personnel costs - Staff, volunteers, training, welfare, recruitment, health & safety
Administrative costs - telecommunications, post, stationery, audit
Programme costs - animal welfare, horticulture and land management, education and training, play and recreation, conservation and any other programmes and activities you are planning
Reserves
Establishing reserves over time, where possible from day one, will enable your City Farm to overcome and future money problems. Within the operational costs, budget for money to be set aside each year to cover the following:
Putting an amount of money away each year to cover depreciation of equipment and furniture, so you can replace these as they wear out.
Establishing and maintaining at least a 100 day Emergency Operating Reserve to meet any operating crises like unexpected increases in costs of say insurance or staffing problems.
Establishing a long-term Maintenance Reserve to keep your buildings and infrastructure well maintained, this will save you money in the long-term.
Income profile mix for operating a City Farm will vary from country to country and region to region
Source Range
Membership fees and on site donations 2.5%- 25%
Fundraising events and individual donations 2.5%- 25%
Local Council/community 10% - 80%
Service contracts 10% - 60%
Social enterprise (net generated income) 10% - 80%
Companies and business donations 5% - 25%
Foundations and Trusts 10% - 50%
Lottery, regeneration programmes, etc 10% - 40%
Sponsorship 0% - 10%
Donations in kind* 2.5%- 10%
The financing mix will vary in two to three year cycles, your budgets will be planned on at least a three-year rolling programme, with in the medium term much of your fundraising targeting the year after next!
Who may fund a new city farm?
There is no one source, but there are many funders who understand the important work that City Farms do. Who will help will vary from country to country. But in most cases for the funders it will not be the City Farm that they will be funding but what a new City Farm plans to do or is doing.
A working City Farm
Once the farm is operating it is more likely to attract further revenue funding because it is delivering services that meet users’ needs and in particular if the city farm reaches people that most other community ventures do not reach.
Some possible funders depending on which country you are located
A mix of some of the following: EU funding, national, regional and local government funding, Lottery programmes, regeneration programme funding, Trusts, companies, sponsorship, individual donations, renewable energy and energy conservation grant schemes, environmental grant schemes, major foundations and trusts, service contracts, fund raising activities and events, generated income and appropriate social enterprises.
Reducing the need for money
The well-managed city farm learns how to save on expenditure and when to spend money to create an opportunity to reduce long term running costs. This is important in all the phases of developing a city farm but particularly important in the building phase, (see advice paper Reducing your need for money).
Remember the people involved are your most important resource
In operating, the City Farm must always recognise that the people involved are the most important resource. They will have contacts who can help the City Farm with money or access to money, donations in kind, ways of saving money, project ideas and much more.