Third Party Funding Explained
The biggest single reason for delaying grant requests stems from the lack of understanding of Third Party Funding. An explanation of this element of the grant process is given below:
Why is Third Party Funding Required?
Under the Landfill Communities Fund, Waste Recycling Group Ltd can voluntarily pass to WREN a percentage of its Landfill Tax bill for distribution to suitable projects. Of this the Government only allows Waste Recycling Group Ltd a 90% credit against this amount.
In order to mitigate the losses incurred by participating in the Scheme Waste Recycling Group Ltd (as a condition of providing WREN with the funding) requires project applicants to secure the help of eligible ‘Third Parties’ who will reimburse them with an amount equal to 10% of the cost of the funding committed. In addition to the level of the grant this also takes into account the automatic levy charged by the Funds’s regulator ENTRUST together with a proportion of the costs associated with administering the grant.
ENTRUST also requires the name of the contributing third party to be recorded at the time of project registration.
This transaction must not be included in the project’s funding calculations on the application form.
In simple terms, £11 of Third Party Funding will release £100 of Landfill Tax Credits for the project.
Who can be a Third Party Funder?
The key consideration regarding Third Party Funding is the term ‘Unique Benefit’. Simply, a contributing third party cannot gain any unique benefit from the project put forward for funding. Examples of organisations which can be contributing third parties are:
Private Companies
Public sector organisations- Local Authorities, County Councils
Charities
Voluntary organisations
Private Donors
A person who shares the benefits with others. For example, a member of a church congregation or a person who uses with others a village hall or other community facility.
Who cannot be a Third Party Funder?
As detailed previously, organisations / individuals gaining a unique benefit from a project cannot be a contributing third party. Specific examples are:
Environmental Bodies
Any individual or organisation, which is directly connected with the landfill operator, WREN or the applicant.
It should be noted that funding from other sources, which has already been ‘banked’ by you cannot be used for the Third Party Funding purpose. The Third Party Funding transaction, while facilitated by WREN, is a transaction outside the realms of the project and its associated costs. The payment is made directly from the contributing third party to the Landfill Operator, Waste Recycling Group Ltd.
