Use this page to learn about what cost allocation and apportionment mean and how it works in practice.
Cost allocation is about when we determine which particular costs relate to which particular project.
Cost apportionment is when we share our organisational running costs across our projects in a way that is fair and reasonable.
When calculating the full cost of a project there are two steps we need to take.
There is a range of apportionment methods available to us. You need to choose one carefully so that we’re only charging a fair and reasonable portion of the support costs to the project.
The most common apportionment methods are:
When the numbers are small it’s often easier to choose one method, such as people, and use it for all types of support costs.
The principles are fairly straightforward. In practice, it’s easy to lose track of the full cost without keeping a clear record of your calculations.
You’ll also need this once you’ve secured funding and the project is up and running so you can easily keep track of your budget.
NCVO worked with Liz Pepler at Embrace Finance to create this guidance.
Last reviewed: 01 December 2022
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