Cases for Courses

Resources for teaching nonprofit management and strategy.

Cases for Courses »

NEWSLETTERS & ALERTS

Stay in touch with the latest Bridgespan Group research, case studies, articles and recruiting information.

Share |

Nonprofit Cost Analysis - Step #3: Allocate Direct Costs

Published Date: 2009-06-03
Author(s): Marta Garcia Abadia    Johnny Lin


In this step we begin the cost allocation process, starting with program-specific expenses (direct costs). Direct costs include each program’s labor costs and other directly attributable expenses.

This should be a straight-forward step for nonprofits that have been keeping finances in distinct program categories. The key here is to take the existing cost information and sort the line items into their respective program areas, as defined in Step 1 of this analysis (Define Your Programs).

If you decided in Step 1 to reorganize your programs in new ways, then this step may take more time as you think through where each cost fits in the new categorization. The principle is the same: distribute each cost item into one of the new program areas you have specified for this analysis.

Sample list of direct costs:

  • Salaries and benefits for staff members working exclusively on one program
  • Travel expenses and personal equipment costs attributable to these staff members
  • Supplies and materials for particular programs
  • Rent, where the program uses a particular facility in exclusivity
  • Contract fees for the program’s partners

Direct Cost Allocation Sample  Excel-16 

Return to top of Allocate Direct Costs 


Share |

Comments:

Send us your comments!

 
 
 

« Top of page




Creative Commons License This work by The Bridgespan Group is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License. Permissions beyond the scope of this license may be available at Bridgespan's Terms of Use page.

Special Sections

Explore tools, frameworks, and other resources related to Promise Neighborhoods, the Social Innovation Fund and other government innovation initiatives.Visit the Special Section>> 

Lessons from the NFL

Wayne Luke Small Headshot What does the  National Football  League have in  common with  nonprofits? More than you might think, says Bridgespan's Wayne Luke in his latest post at the Harvard Business Review.



Wikimedia Strategy

Barry Newstead Thumbnail Get a behind-the- scenes look at the  Wikimedia  Foundation's  community-driven path to strategy in Bridgespan partner Barry Newstead's blog at the Harvard Business Review.



Follow BridgespanGroup on Twitter