Blog entry

Are You at the Table or On the Menu?

Do you know what your annual indirect cost rate is? Can you honestly tell a potential giver that you know what your direct and indirect costs are?  If not, you’ll continue to starve, and miss out on a trend that will collectively give our nonprofit sector a huge leg up.

Cost allocation practices are essential to any nonprofit interested in growth and sustainability. To donors, funders and the government, accurate cost allocation indicates less risk, financial sophistication and the ability to explain – exactly – an accurate picture of your nonprofit’s financial health.  It is also a way for nonprofit leadership to know the real cost of programing, fundraising and mission fulfillment.

Fortunately, the Office of Management and Budget’s uniform guidance now gives nonprofits a road map to overhead.  Most of us can identify our direct costs, but what about indirect costs that are a single touch away from program/services? Include those costs and you may find the grant you received to run a program is too expensive to accept!  Or, include those costs initially and truly receive the money you need to operate.

If you don’t know what your indirect costs are, you can’t effectively talk about your impact, or more specifically, how to increase your impact.

Help is on the way. The Impact Foundry has partnered with CostTree, the developer of the most comprehensive cloud-based cost allocation software on the market today. This offering is a cost allocation platform that allows organizations of all sizes to maximize their indirect cost reimbursements, better understand their true cost of service, and run scenarios to determine what cost structure provides the greatest organizational impact. 

By partnering with CostTree, you can spend less time worrying about the spreadsheet, and more time determining how to put more resources toward the departments, projects, and people that keep your impact growing.

A cohort is forming to experience the CostTree platform at a significant discount. If you’re interested in joining us, or learning more directly from our CostTree partners, please email me.

-Kim Tucker

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