Infrastructure, Core Functions, and Full Costs

Personnel costs are often the largest portion of the budget for most small and midsize nonprofits. Folks who work for small and midsize nonprofit organizations generally are intensely devoted to mission accomplishment, sometimes working longer hours at lower pay than their for-profit counterparts. They deserve good tools and ongoing professional development opportunities and skills training. Budgeting to provide equitable pay and benefits for staffers is also a way to keep those well-trained folks with you.

High quality programs sustain and grow with a well-trained and well-equipped staff, both program and administrative, to support them. Consider including information technology upgrades and maintenance, up-to-date software for productivity, evaluation, and data collection, and staff development costs in the budget.

Ensure that funders, and the organization itself, understand what the full costs of each program are, and that these full costs are reflected and requested in each program funding application.

A sustainable organization can best grow and prosper by ensuring it has made coordinated investments in programming, core organizational capacity, and financial resources. Do your best to respectfully inform funders during the grant proposal process of the true, full costs of programs and why their refusal to cover the costs of core support functions will ultimately undermine the organization’s ability to continue to deliver high quality programs.

The model above, showing budget considerations for grant proposals, is only for internal reporting.