True Program Costs: Program Budget and Allocation Template and Resource
This guide and accompanying spreadsheet template from Propel Nonprofits breaks down the process of understanding true program costs—whether through budgeting or financial reports—into several stages.
“While the long-term goal for nonprofits is not to return profits to shareholders, we all know that nonprofits are business entities that need to maintain financial health and stability in order to achieve their mission. Understanding the true, full cost of delivering various programs and services in the community is a critical piece of the management puzzle.”
Overview of the Process
- Define your programs
- Establish format and structure for accounting
- Identify direct and indirect costs
- Select allocation approach and methods
- Allocate staff salaries, benefits, and taxes
- Assign direct expenses
- Allocate direct costs by an appropriate method
- Identify program specific and general income categories
- Allocate indirect (administrative) costs
- Allocate fundraising costs
- Bring it all together for review
