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Milestones and funding

Please read the following step-by-step instructions thoroughly before completing Section 4 of the application form. 

The purpose Section 4 “Milestones and funding” of the application form is for the SMF assessment panel to get a clear understanding about the milestones for the first year of the project, and if applicable, a summary of Years 2 and/or 3.    

Note:

It is important that you keep a record of all your workings so you are able to explain this breakdown should funding be successful.  You may be well experienced in project/budget planning or a complete novice.  Either way, it is important to ensure that you plan your project well ahead of the application closing date of 22 January 2009.  Remember, all figures, although estimates, need to be as accurate as possible based on your careful planning and budgeting.

If your application is accepted to Stage 2, an Adviser will work with you to prepare a more detailed project plan for submission to the SMF assessment panel for final approval. 

If you are applying for multi-year funding please ensure you refer to ‘Multi-year funding’ on page 4.

 

MILESTONES

Step 1

Outline up to six milestones

Table 1 of the application form asks you to clearly outline up to six milestones for the period 1 July 2009 to 30 June 2010 (ie, Year One of the project only).      

  • A milestone is a measurable event that indicates a significant development or a key achievement at a specific stage in the project.  
  • Milestones provide a measurement showing that tangible progress has been made on the project and ensure validation allowing the project to move on to the next step if the milestone is met or take corrective action if the milestone is not met.  For example, ‘the working-bee has been held with 100 volunteers planting 5000 native trees’. 
  • Each milestone must have a due date associated with it; this is the date by which the milestone will be fully completed so you can submit a claim to the Ministry for payment. 
  • During the project, it is possible to work on more than one milestone at once however the due dates do have to be in chronological order.  Often there may be dependencies, so that one milestone can't be reached, or started, until another one is finished.
  • Funding is paid in instalments tied to the achievement of each milestone.  

Other examples of milestones may be as follows:

  • The steering group has been established and Terms of Reference have been agreed and signed.
  • Five waste minimisation workshops involving 150 participants have been held.
  • An inventory of planting success in Area 1 has been completed.

 

CASH COSTS

Step 2

Calculate the estimated CASH cost of each milestone

Once you have outlined your milestones and their due dates the next step is to work out the estimated cash cost of each milestone.

When developing your application for funding it is imperative that you budget accurately as these are the figures that the SMF assessment panel will review and give provisional approval on. 

All cash costs must be exclusive of GST.

Note:

Government funding is a taxable activity. As such, if you are conducting a taxable activity and your annual income exceeds $40,000 per annum, your organisation will need to be registered for GST.

The SMF grant is exclusive of GST therefore all costs you provide in your application must be stated exclusively which means we will pay GST additional to the amount of the fund. 

You will be able to offset the GST on any goods and services you buy against this. If you are not registered for GST then you will bear the full cost of GST on goods and services you purchase in relation to this project. Registering is a relatively straightforward process which can be completed online at www.ird.govt.nz or by contacting the Inland Revenue Department on 0800 377776.

All cash costs must fit under the categories outlined below.  There are no set figures for calculating your cash costs however they must be representative of current market rates (especially personnel).   

When considering the larger costs of the project, the use of appropriate procurement methodology is required (ie, tendering for consultants).

Categories Description
Personnel The employment costs (wages/salaries) of all the people directly involved in the project. 
Administration Includes office expenses, rents / lease, insurance, postage, couriers etc. Only include costs not covered by the personnel costs above, and only those that relate specifically to the project.
Consultants and contractors Third parties you have sub-contracted to work on the project (eg, environmental consultancies, Crown research institutes).

Rental and leasing of equipment
Includes cost of renting or leasing equipment (eg, digger hire).
Travel and accommodation Specific travel and accommodation costs related to the project (eg, mileage allowance, air travel, hotel accommodation and out-of-pocket expenses).  Refer to Appendix 1 for a list of travel and accommodation expenses and allowances that you may reasonably incur.
Promotion and dissemination Expenses that relate to production, printing and publication of articles, documents and videos, providing workshops, seminars, field days and associated costs such as advertising.
Financial / legal expenses Financial expenses incurred solely in relation to project costs and costs relating to legal expenses.
Other Any other costs associated with the project which do not fit under the categories listed above.  Note that these costs must not be for the purchase of capital equipment. 

Some examples of calculating cash costs may be as follows:

Personnel

You need to employ a part-time co-ordinator working 20 hours per week @ $25 per hour over 12 months.  Therefore, the estimated cash cost would be $26,000.

Consultants and contractors

It may be necessary to engage a consultant or contractor to deliver the project.  If so, you would have to research their hourly rate (exclusive of GST) in order to calculate an accurate cost.   For example, a consultant may quote you $120 per hour (exclusive of GST) for working 10 hours per week for 10 weeks.  Therefore the estimated cash cost would be $12,000 (exclusive of GST).

Travel and accommodation

If your project includes travel you will need to research flight costs, accommodation costs and other expenses to ensure accurate budgeting. For example, four flights from Wellington to Auckland at $500 return (exclusive of GST) would be an estimated cash cost of $2,000 (exclusive of GST).

You may use a private vehicle for business relating to the project and mileage (petrol) may be claimed at 62 cents per km.  For example, the distance from Auckland to Hamilton is 126 km therefore the estimated cash cost to the project would be $78.10. 

Promotion and dissemination

Your project may include the publication of a brochure.  If so, you will need to research the costs of design, printing, distribution etc (exclusive of GST) in order to calculate an accurate estimated cost.    

Note:

Funding is strictly for the period commencing 1 July 2009.  Expenses that are incurred before this date are not eligible for reimbursement by the SMF.

Project allocation

If your organisation is involved in other activities/projects (besides the SMF project) some costs may be difficult to allocate directly to a project (eg, rental, electricity, administration). In these cases you may claim a proportion of costs equivalent to the time your organisation will devote to the SMF project. It is important that you are able to explain this breakdown at the project planning stage.

Cost recovery

Projects funded by the SMF are not permitted to generate a profit for an organisation; however aspects of your project may be self-funding. For example, if an output of your project is to produce a booklet, you may consider charging money for the booklet on a cost-recovery basis. If this type of situation applies to your project, you will need to estimate the income which would be generated from sales.

Reporting requirements

If you are successful in obtaining SMF funding, there are a number of reporting and compliance tasks that you are required to undertake which will involve a time commitment.  Please ensure you consider this when calculating your costs. 


 

IN-KIND CONTRIBUTIONS

Step 3

Calculate the estimated IN-KIND contribution of each milestone

Many organisations obtain support in forms other than money.  This type of support is referred to as ‘in-kind’, that is assistance in the form of time or resources donated to the project.  For example, you may be able to share office space, or obtain free photocopying from a local business.   

Note:

In-kind contributions can count towards the remaining proportion of total project cost. 

The in-kind contributions for each milestone will need to be calculated using the following two categories: 

  • personnel (eg, wages/salaries) 
  • project support (eg, venue hire). 

For ‘personnel’ you must calculate the in-kind contribution using one of two set rates as outlined below. 

Rate A: $75 per hour Rate B: $20 per hour
For technical and scientific expertise or professional advice. This covers, for example, council officers, engineers, consultants and accountants. For general labour costs, administrative support and those not covered by Rate A.


For example:

Personnel (Rate A: $75 per hour)

  • A scientist may provide their professional advice on a technical matter. Normally, they would charge an hourly rate however they have agreed to provide their expertise to your project without charge.  If they provided 5 hours of advice per week, over a 12-month period (using the set in-kind personnel rate of $75 per hour) the in-kind contribution would be $19,500.

Personnel (Rate B: $20 per hour)

  • A local business may provide administrative support, such as typing, to the project.  Normally they would charge an hourly rate however they have agreed to provide their expertise to your project without charge.  If they provided 15 hours of administrative support per week, over a
    12-month period (using the set in-kind personnel calculation of $20 per hour) the in-kind contribution would be $15,600.

For ‘project support’ you calculate the estimated figure that you expect the contribution to be (eg, free use of a workshop valued at $1,000).  This
figure should be valued at the lowest possible market rate and may include:

  • meeting or workshop contributions such as room or hall hire, and catering, or
  • free use of significant capital equipment or facilities such as construction machinery.  

For example:

  • A local company may provide your organisation with some office space.  Normally, the office space may be let at $450 per month however the company has agreed to allow your organisation to use the space free of charge.  Therefore over a 12-month period the in-kind contribution would be $5,400. 
  • A local hire company has agreed to support your project through providing a rotary mower.  Normally, they would charge $300 per day for the rental however they have agreed to allow your organisation to use it free of charge.  Therefore by using the rotary mower five times over a 12-month period the in-kind contribution would be $1,500.

 

ESTIMATED PROJECT COST
Step 4

Calculate the estimated project cost 

Now that you have accurately calculated both the cash costs and the
in-kind contribution for each milestone, by adding them both together you will arrive at the estimated project cost (excluding GST) for the year commencing 1 July 2009 to 30 June 2010. 


 

SMF SHARE OF COSTS

Step 5

Calculate the SMF share of costs

The SMF can only fund a percentage of your estimated project cost and you need to secure the balance.  The balance may be from other cash or in-kind contributions.  The SMF will fund:

  • A community group or iwi/hapū up to a maximum of 80 percent of the total project cost.
  • Local government up to a maximum of 60 percent of the total project cost.
  • A business up to a maximum of 50 percent of the total project cost.

For example:

  • If your total project cost is $58,000 and you are a community group then you can seek up to a maximum of $46,400, excluding GST (80% of the total project cost) from the SMF.  You will then have to secure the balance of $11,600 (either in cash or in-kind support) from other sources. 
  • Alternatively, if you are a business (using the same total project cost as above) then you can seek up to a maximum of $29,000, excluding GST (50% of the total project cost) from the SMF.  You will then have to secure the balance of $29,000 (either in cash or in-kind support) from other sources.

Note:

The percentages listed above are ‘up to a maximum of’; this means you may seek funding from the SMF up to the agreed percentage (for your type of organisation) but may not exceed the agreed percentage.


 

BALANCE OF COSTS

Step 6

Confirm cash income and in-kind

Now that you have calculated the estimated project cost for Year One of the project, as well as the share of funding that you will request from the SMF, you will need to ensure you can secure the balance through other cash income and in-kind.  You will need to specify both the cash income sources and the in-kind sources on the funding summary (Table 4) of the application form.   

Step 6 (a)

Multi-year funding

Only complete this step if you are applying for multi-year funding.Complete Table 2 and/or 3 of the application form by briefly summarising the project and the estimated project cost for the year.  You will need to carry out the same process for calculating the estimated costs of both Years 2 and/or 3; however we do not require a breakdown of milestones at this stage.

Note:

If your application for multi-year funding is successful, then funding for subsequent years will only be made available upon annual SMF assessment panel approval.  The SMF assessment panel will assess your project’s achievements for the previous year(s) and ensure it has met its objectives before approving funding for the coming year. 

For detailed information about multi-year funding refer to page 4 of
the guide.

 

FUNDING SUMMARY

Step 7

Complete the funding summary table

Now that you have completed all the steps outlined above you are ready to complete the funding summary (Table 4) for each year that you are applying for funding. 

Estimated project cost (A) The total amount the project will cost you to complete in both cash costs and in-kind contributions.
Funding sought from the SMF (B) The amount of funding you are seeking from the SMF.
Balance (A-B) = (C) The difference between the estimated project cost (A) and the funding sought from the SMF (B). 
Cash income (D) All other sources of cash funding (excluding SMF) that your organisation will be providing, or receiving from other sources to carry out the project.  You should only include income that has already been approved (or applied for).  Confirmation of funding in writing will be requested before 1 July 2009.
In-kind (E) Your in-kind figures will automatically match that of your in-kind contributions.  Refer to Step 3 when you calculated your in-kind contributions. For example, if XYZ company is providing free use of their meeting room valued at $500 per day then the in-kind figure you list on the funding summary will also be $500.  Alternatively, if a scientist agreed to provide his or her technical expertise at $75 per hour (personnel set in-kind rate) for 10 hours per week over 12 weeks then the in-kind contribution of $9,000 would match the in-kind figure that you list on the funding summary.
Total cash and in-kind (D + E) = (C) This figure should equal the balance (C) once you have subtracted the funding sought from the SMF (B) from the estimated project cost (A).

SMF share of costs (F)

This is the percentage of the estimated project cost that you are seeking from the SMF.

An example of how to complete the funding summary table is below:

 

Year One
FY 2009/10

Estimated project cost (A)

$125,000

Funding sought from the SMF (B)

$93,750

Balance (A – B)  = (C)

$31,250

Cash income – Forest and Bird

$10,000

Cash income – Lower Hutt Lions Club

$4,000

Cash income – Lower Hutt City Council

$12,500

Total cash income (D)

$26,500

In-kind – XYZ organisation

$2,000

In-kind – Friends of the Valley River Inc Soc.

$2,750

Total in-kind (E)

$4,750

Total cash and in-kind (D + E) = (C)

$31,250

SMF share of costs (F)
(funding sought from the SMF (B) divided by the estimated project cost (A) x 100

75%

 

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