Let's talk about core costs
Because without them, charities can’t survive, let alone create lasting change.
If you’re running a home or a business, you don’t question whether you need to pay the gas bill. Or broadband. Or insurance. You know you can’t function without them.
The same goes for charities. But here’s the problem: far too often, those essential costs, known as core costs, often go unfunded, and treated as an optional extra, as ‘overheads’ to be minimised or justified.
Yet, it’s these essential costs that hold a charity together behind the scenes.
Charities are being asked to do the impossible
Many charities begin as grassroots organisations powered by the generosity of volunteers. But when demand grows, when people need help all year round, charities find themselves having to grow. By that point, goodwill alone isn’t enough to keep the group running and charities face four options:
- Hire staff and hope they can afford to keep them (if funding allows).
- Stretch volunteers even further (they’re often people already giving everything they can).
- Reduce opening hours (sadly meaning supporting less people).
- Or close their doors.
That’s the reality when core costs aren’t covered.
Because you can’t run a youth project without a youth worker. That youth worker needs a phone, a laptop, a space to meet young people. They need time to build trust, consistency to support progress. Yet most funding only supports the activity, never the structure that makes it possible.
It’s like asking someone to build a house, but refusing to pay for the foundations.
We wouldn’t ask a business to deliver a service without staff, systems or premises.
So why do we expect that from charities?
The catch 22 of charity funding
Charity core costs include:
- Salaries
- Rent
- Utilities
- Insurance
- Internet and IT systems
- Admin support
They’re not ‘nice to haves’. They’re the bedrock of stability.
So, when energy prices soar and National Insurance rise out of the blue, charities can’t just increase their prices and pass them on to their beneficiaries, the very people who need them most. Instead, they result in having to apply for grants just to keep the lights on.
Yet, as we know all too well, many funders prefer funding shiny new projects not core costs. And that forces charities down a slippery and dangerous route of having to launch new projects just to unlock new funding to cover the essentials. But each new project brings more admin, more delivery, and more demand on already stretched teams. They try to do more with less. Eventually, they reach burn out. And we lose them.
But it’s avoidable.
Salaries aren’t a luxury
Here’s one of the most controversial truths: you can’t deliver anything without paying for people’s time.
Volunteers are incredible. But they’re not an unlimited resource. Many of them are burning out, and on top of that fewer people can afford to give their time and more people are retiring later in life.
Those who are volunteering are taking on more responsibility than ever, doing more, for longer, with less support.
Paid staff bring expertise, consistency, and a duty of care both for the people they support and the volunteers they work alongside. Without them, the sector risks losing talent and weakening its own impact.
Paying staff is ethical and essential.
Project vs Organisation? Why Choose?
The charities making the most difference are those delivering projects and building resilient organisations that can weather storms, plan ahead, and respond quickly when their communities need them.
That’s why we must fund both the projects and the people behind it. Not one or the other.
IVAR-accredited funders, like us, know this. Trust-based funding works. It recognises that charities know best how to allocate resources. When they’re given flexibility, they deliver greater impact, not less. As funders we should be championing core funding, because it’s the right thing to do and because it works.
45% of funds awarded by Point North in 2024/25 went towards capital costs, salaries and general overheads.
It’s time to back core costs
We hear a lot about “value for money”. But leading charities to under-report their core costs doesn’t make your funding go further. It just increases pressure, reduces effectiveness and undermines long-term change.
We need a shift from a scarcity mindset to a sustainability mindset.
Charities must be honest about what it truly costs to deliver change. And funders must be bold enough to back them.
Because core funding is not just about keeping the lights on. It’s about building something that lasts. Something that works. Something that changes lives.
Here’s what needs to change
Charities:
- Tell us what it really costs to deliver your work. Be transparent about what keeps the wheels turning. Don’t underestimate your true costs.
- Make the case for your infrastructure as clearly as you would for your project.
Funders (that’s us, and hopefully more of us soon):
- Champion core costs.
- Make unrestricted funding the norm, not the exception.
If we want lasting change, we have to stop funding charity like it’s a side hustle.
So let’s stop asking charities to run on fumes. Let’s fund the essential costs and together, let’s build something that lasts.
Interested in supporting our mission?
There’s more than one way you can support our mission to make today better and tomorrow brighter for our communities in County Durham, Tees Valley and the wider North East
Speak to us and we’ll go through the different options together.
0191 378 6340
