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A group of young people play a game of tag in a boxing gym.

Good quality, safe facilities are vital in supporting the delivery of sport and physical activity. However, running, maintaining, repairing and replacing facilities can be expensive.

While running and maintenance costs are often included within annual budgets, setting aside money to repair and replace facilities and equipment at the end of their useful life can be overlooked.

If you have your own facilities or equipment, it’s important to save enough money to refurbish or replace them when the time comes. A sinking fund is designed to help you do this. Read on to find out more…

What's a sinking fund?

A sinking fund is money that you purposely set aside for repairing or replacing your facilities and equipment at the end of their useful life.

By planning and saving money ahead of time, your organisation will be in a good position to cover the costs associated with keeping your facilities and equipment in a safe, functional, and fit-for-purpose condition.

What's the difference between a sinking fund and reserves?

Unlike regular savings or reserves, which can be used for any purpose, a sinking fund is for major repairs and replacements. This includes floodlights, playing surfaces, large-scale equipment, maintenance equipment, boilers, and windows.

It’s a good idea, where possible, to have both a reserve fund and a sinking fund. For more information on reserves, check out our reserves policy page.

Why do you need a sinking fund?

There are lots of benefits of having a sinking fund, including:

Helping you to save gradually, reducing the financial burden on your organisation, your participants and volunteers.
Avoiding the panic and uncertainty of having to find large sums of money for major repairs or replacements. You’ll already have put money away for this, so covering the costs will be a lot more manageable.
Reducing the need to rely on grant funding and other income streams that aren’t guaranteed, or may not prioritise the replacement of facilities.
Supporting your organisation's longer-term financial planning to help you become more financially sustainable.
Supporting your organisation to cope with large expenditures without disrupting or impacting upon other activities.
Enabling you to keep your facilities safe, well maintained, and fit for purpose at all times, which will help you retain existing participants and partners, and attract new ones.
Fulfilling the terms and conditions of any major capital grants you may have received (a sinking fund is often a condition of award).

What are the risks of not having a sinking fund?

Without a sinking fund, your organisation could face serious financial and operational challenges when replacing or repairing facilities or equipment.

Without the necessary funds, there’s a risk that your facilities and equipment may become unsafe or unusable, which could negatively impact on your ability to:

  • meet the standards required for participation or competition,
  • meet the needs of your participants and volunteers,
  • generate enough income to cover your costs. 

Without a sinking fund, your organisation may need to raise money through other means like loans, which may impact on the sustainability of your operations and future development plans. 

How much should you save in your sinking fund?

It’s common to contribute to your sinking fund every year. The amount you need to save depends on the type of facilities or equipment you’ll need to repair or replace, how long they’re likely to last (their lifespan), and how much it’s likely to cost. 

There are lots of ways you can determine how much you should set aside, so you’ll need to work out what’s best for your organisation. Often the total costs of any repairs or replacement, including contingency budgets and inflationary allowances, are divided by the lifespan of the facility or piece of equipment. 

Some National Governing Bodies offer advice on this; for example, the Football Foundation's National Pitch Replacement Fund suggests organisations should save enough each year to replace a well-maintained 3G pitch surface every 10-12 years.

The LTA Tennis Club Sinking Fund Calculator is also a helpful tool and can help you estimate the amount required as a sinking fund for tennis facilities.

Be sure to set aside an annual amount, either through regular contributions, fundraising efforts or by setting up a standing order.

A group of men play football on an artificial football pitch, with the floodlights on

Where should you keep a sinking fund?

It’s good practice to put your sinking fund in a separate savings account, so it’s not used for other purposes or mixed up with other budgets. This can also make it easier to track its progress to ensure you’re reaching the targets you’ve set.

Some savings accounts offer higher interest rates for long-term savings, which can help your sinking fund grow faster. Speaking to your bank or a financial advisor can ensure you get the right type of account for you. 

Can you fundraise for a sinking fund?

Yes, fundraising by hosting events or seeking donations from your participants can help to boost your sinking fund.

Keep in mind that people might be less likely to donate to a fund that won’t be used for several years, so focus on the importance of maintaining safe and high-quality facilities.

For more tips and ideas, check out Buddle’s fundraising page.

Top tips

Our top tips for establishing a sinking fund are to:

Start early
Begin saving as soon as possible to spread out your costs over time.
Audit your facilities
Look at what facilities and major pieces of equipment you have that will need repairing or replacing in the future. Work out how long they’re expected to last and how much they’ll cost to replace when the time comes.
Set targets
Set an annual target that you’d like to contribute towards your sinking fund and plan how you’ll be able to achieve this.
Think ahead
Estimate your future costs by including a contingency budget and factoring in inflation.
Keep it in a separate account
Having a dedicated savings account helps to ensure the fund is protected and easy to track and manage.
Review it regularly
Adjust your savings target to reflect market changes and ensure you’re on track.