Should you show digital costs separately in grant funding applications?
Helping UK non-profits decide whether to integrate digital costs into core and project funding application budget lines.
Using digital technology has become quite normal for most UK charities. They use digital tools to run internal operations and deliver services. They use some tools organisation wide and some on a project by project basis.
However, funding digital costs is not yet entirely normal for funders. Some see digital infrastructure as part of charities core costs and some don’t. A few feel confident about funding digital services, but many don’t.
As a result of this I’ve seen two things happen:
- ‘digital funding’ has come to mean different things to different people
- it’s become difficult to know whether to show your digital costs separately or in an integrated way in a funding bid.
We’ve tried to remedy the first challenge with ‘digital funding’: what we really mean.
This article will help you decide whether to show your digital costs separately.
A story about integrating digital everything
Its 2030 and the Head of Digital role no longer exists in any charity. ‘Digital’ is no longer a separate function. Human Resources, Chief Executive, Business Development and Project Manager still are. But digital has become so much a part of how everyone does their job that it doesn’t need someone to lead it or integrate it. It’s just another resource.
No one even has a digital strategy anymore. Because using digital is woven into everyone’s organisational strategy..
However, we’re not in 2030 yet. Although it’s normal to use digital tools, digital culture and design thinking are not yet normal. So for now, naming things as ‘digital’ still has a purpose. It helps people rally together and show allyship for its cause.
Advice for any application that includes digital costs
Whoever you are applying to and whatever amount you are applying for you need to find a narrative that suits the funder’s level of digital comfort.
To do that you need to find out how confident and experienced they are at funding digital costs.
There’s 3 ways to do this. Its best to do all 3:
- Check their website. Most don’t say much about digital costs.
- Check their strategy. Find it online and run a search for the word ‘digital’. This may reveal something.
- Contact them. If you’re applying for core funding ask what digital costs they consider ‘core’. If you’re applying for project funding ask: a) what digital projects they have funded; and b) what percentage of a budget they are comfortable for you to spend on external support. External support can often be the most expensive part of a project, after salaries. It is the budget line funders feel least confident about.
Advice for service or project applications that include digital costs
Perhaps you are starting a new project or seeking to maintain an existing service. Maybe you’ve already developed ways of using digital tools. Or maybe you’ll be paying for help to customise or develop this.
Identify what you will need to spend on:
- Digital roles
- Staff training
- Software licences and subscriptions specific to that project
- External support
If your project already exists and has a well developed digital infrastructure then you’ll need a maintenance budget. Name your maintenance costs and make sure you educate the funder as to why maintenance is necessary.
If your project will be using tools that are already in use organisation wide (for example, a CRM) then add a portion of these to your budget’s management and administration line. Do the same for any other costs that are part of your core digital infrastructure, the same way you would for other core costs like rent.
Advice for core funding applications that include digital costs
If the funder is confident with digital then you could talk more about your digital infrastructure needs and create budget lines for different expenditure items.
If a funder isn’t so confident then you might want to integrate these costs into your conventional budget lines, but without obfuscating them.
“We fund core digital costs. Sometimes that may be transformational work (new ideas) or an organisation transitioning from a mainly offline way of working to a more online one. Or part of a more gradual evolution over time to address their changing strategic needs
We don’t really see funding digital as separate from the core work charities are trying to deliver. A lot of work we support has a digital component. We try not to be scared of it.” — Josh Cockroft, Data Lead, Esmee Fairbairn Foundation (speaking at Charity Digital’s Digital Fundraising Summit 2023)
Further information
What do we actually mean by ‘digital funding’? Find out about the 3 types of digital costs and see examples of each.
Want to understand your core digital costs and integrate them into your budget better? This series of 3 articles will help you:
- How to understand your current digital costs
- How to budget for future digital costs
- How to integrate digital costs into your operating budget
Thanks to Cat Ainsworth and Alex Mecklenburg of Dot Project for their contribution to this article.
