Working out costs

Q: I am from a locally based Family Support Service. We have just been approached by one of the lead agencies in our area requesting that we partner with them. They have said they would like us to provide home visiting and other support services for vulnerable families in our area. They have asked me to tell them how much our costs would be. How do I work out the costs for our service?

A: First of all you will need to sort out the amount of service delivery the Lead Agency will want you to provide. It’s important to be clear about that right up front – and it could be expressed in terms of number of hours of visiting, number of families to be visited (in which case you will need to estimate the length of visits and how often – and don’t forget to include travel time as well).

From this you can work out the worker hours you will need (and don’t forget to include time for staff meetings, supervision, travel between clients, time for collating data and any reporting required, or any meetings that will need to be attended).

Once you have the number of worker hours you can calculate the cost of direct service wages, plus on costs like super, leave loading etc and allowance for penalty rates if any work is outside normal hours. Again, don’t forget to take into account not only direct service time, but also time for staff and consortium meetings and planning as well as expected award increases and the need for penalty rates if required.

Then its time to consider all costs, so that they can be factored into the figure you give the Lead Agency. This means looking at the full range of costs which may include but not be limited to:

• Direct service costs – as discussed above
• Costs of setting up and managing the partnership (time, staff involvement)
• Additional administrative and coordination / management costs e.g. to cover the costs of advertising and employment, payroll, supervision and support for EIP direct service staff
• Costs to provide admin support to the new service, if needed
• Rent to provide space for service staff and for service delivery if any of the activities are centre based
• Premises – cost of reorganisation or refurbishment to accommodate new staff and services
• Additional office furniture and equipment required for new staff
• Equipment and resources to set up space(s) for programs
• Computers and other information technology upgrades required
• Travel costs, especially for the home visiting service. You will need to consider vehicle purchase vs. mileage reimbursement costs
• Costs of data collection and reporting

See also Tool 2: Checklist for small and medium sized NGOs in forming partnerships under Tools and Resources on the NCOSS website, which provides more detail and will also help you look at how the proposed new services will impact on the financial operations of your organisation, to make sure there are no detrimental effects on what you are doing now.