Updated: September 18th, 2024; Owner/contact: @Kofi Gane Role: Project Finance

<aside> <img src="/icons/apple_gray.svg" alt="/icons/apple_gray.svg" width="40px" />

Administrative costs are all those costs needed to keep Sonder running before, during and after engagements with clients, donors or projects.

Administrative costs at Sonder generally include everything from the technology tools that support Sonder’s work, general personnel such as accounting, admin, other support, etc - whose work cuts across all Sonder and its projects, as well as governance and compliance-related costs that ensure that Sonder’s strategies, legal body and risks are being carefully managed.

</aside>

It is, however a cost that is often fractionally covered under funded activities. As a result, a strategic dilemma often ensues – on the one hand how these costs can be recovered, and on the other, how much is enough to equitably assure the sustainability of Sonder.

This document sets out Sonder’s policy on the recovery of the administrative cost to Sonder, of procuring, managing and completing its donor/client-funded projects/activities sustainably and professionally.

Name and Scope of the Policy

This policy covers administrative costs recoverable from all donor/client-funded projects managed by Sonder. It is called Recoverable Admin Costs – RAC.

How much RAC will be budgeted?

Sonder requires that the budgets for all new project proposals include a provision for RAC of 15% of total direct project costs. RAC does not apply to proposals for unrestricted** funding.

image.png

** Unrestricted funds, are funds from any source, solely awarded for Sonder’s organisational use and with no restrictions on how or what they are used for at Sonder.

How will RAC be charged?

Once the RAC has been included in a project budget and approved by the donor/client – it will be taken (i.e. charged to the project) equitably over the life of the project in 1 of 2 ways:

Invoiced Disbursements:

Where disbursements from the donor/client are received on submission of an invoice by Sonder, the applicable RAC will be charged to the project when invoices are settled/paid.

Tranche/Pre-Set Disbursement:

Where disbursements are received as tranches on pre-set dates indicated in the contract, the applicable RAC for each year of the project will be charged to the project evenly and quarterly in quarters 1 to quarter 3 (Q1 to Q3) and:

  1. Where the donor/client requires RAC to be a percentage of actual expenditure, a reconciliation shall be carried out in Q4, to ensure that total RAC charged for Q1-Q4 match the correct percentage of actual expenditure for Q1-Q4. Any reconciling adjustments will be done in Q4 of each year of the project’s (or the last quarter if project ends before Q4 of a calendar year).
  2. Where the donor/client has no such requirement as in (a) above, the Q4 charge shall follow the same order as Q1-Q3.

Justification to donors