OSCAR Service losing money?
Out-of-school care and recreation (OSCAR) is in trouble, and has been for a while. Organisations that only do OSCAR are finding it hard to make ends meet, and those for which it is a service amongst others are subsidising it from other income streams.
This has not always been the case. In fact, OSCAR programmes sometimes used to be set up as a way to generate net income for an organisation. The main cost drivers are higher requirements for recipients of MSD grants for such services, mostly around staffing, higher-than-inflation rises in wages, and lower-than-inflation fee increases.
Firstly, if OSCAR is just one of your services, it is important to know whether it is losing you money through its direct costs alone, and how much. This can be achieved on an ongoing basis through activity tracking in your accounting software, or you may be able to simply look back at your costs in a month or a year and clearly identify them.
Secondly, you need to make a good estimate of how much of your admin costs (your overall manager, electricity, IT etc) is caused by OSCAR. There are a number of different ways to do this, and we can help with this. If your total expenses from all this is more than your income from fees and MSD grants, other income streams are subsidising the OSCAR programme.
At this point a decision needs to be made on whether this is acceptable to the organisation, especially if there is no realistic way of cutting costs or increasing revenue. Using general operational funding to prop up an OSCAR programme means this money is not available for other activities. It also raises the question if it is the sector’s role to subsidise low earnings and government’s inadequate family assistance with charitable funding.
A number of organisations are seriously considering discontinuing such programmes. This is never just a financial decision, of course, but with limited resources it is a good idea to have a discussion about where these are best utilised.