When it comes to your project it's important to understand the different types of costs involved. Projects often consist of a mixture of capital and revenue costs that make up your target. Additionally, it's good to keep in mind that some funds have specific criteria regarding which aspects of the project can be funded. For example, some funds will only pledge towards capital cost items.
So what's the difference between the two? Let's break them down and help you to better navigate your crowdfunding journey.
Capital Costs: These are costs associated with purchasing assets or refurbishing existing assets, including the purchasing of equipment. These are expected to have 'wider community benefit' and to have an expected lifespan of at least 5 years.
Revenue Costs: These are ongoing operational costs where there is no lasting asset. There must be community benefits shown and can be associated with the delivering of workshops or tangible running costs for an organisation. It should still feed into a specific project with clear parameters (including time frame and outcomes).
Example cost items and the type of cost they fall under
Building of new village halls, community halls, sports pavilions etc. including purchase of land. | Capital |
Significant repairs to the structure / fabric of any permanent building, including items such as windows, floors, solar panels, heat-pumps and associated installation costs. Especially where this improves the energy efficiency of the building. | Capital |
New gardens, allotments, orchards, community farms, etc. | Capital |
Costs for a group that puts on positive activities, e.g. venue hire, office/printing costs, staff costs. | Revenue |
Funding professionals to support people with specific needs, e.g. mental health issues, physical disabilities, dementia | Revenue |
Helping to fund access to positive activities where a person’s circumstances make it hard for them to afford. | Revenue |
For more examples see here: Differences between Capital vs. Revenue funding