Monday, April 11, 2011

Understanding True Program Costs = Empowerment

We got down to business this week in figuring out what it costs to deliver programs in our nonprofit agencies. Seventeen participants in the "Calculating True Program Costs" workshop delivered by Nonprofits Assistance Fund and sponsored by Bremer Bank in Willmar know the value of understanding the financial implications of running distinct and various programs in pursuit of their nonprofit missions.

Trainer Janet Ogden-Brackett, loan fund manager with NAF, led us in the work of breaking it down and thinking it through: Organizational budget; Program budget; Project budget; Grant budget. We contemplated Functional Expense Categories: Program expenses; Management and General expenses; Fundraising expenses. We took into consideration: Restricted and Unrestricted Income; Direct and Indirect Expenses. We studied: Staff time Allocation Methods and Assignment of Expenses, including "overhead." We left the workshop with materials, examples and templates.

Q. Why and what for?
A. To know and be able to communicate what our work as an agency and within individual programs actually costs.

Especially in this current environment of ever-limited and often-diminishing resources for community and nonprofit organizations, we need to make informed management decisions about the use of those resources. And we need to be able to demonstrate to supporters what our financial needs are and how we're using contributions. "Good information about true program costs," Ogden-Brackett explained. "And the amount of subsidy for those programs not self-supporting is the first, essential step."

If you missed this workshop and want to receive or review this practical training or other financial training sessions for yourself, check out NAF's training calendar. Let me know if there are other topics you'd like Bremer to host close to home. My email address is:

Lois Schmidt, NRS, Willmar


Deb Hess said...


I can't thank you enough for hosting this training session. I have asked for help many times over the years, from other non-profit directors, to help me better understand how to determine true program costs. I learned that maybe they just didn't know how to teach it, even though it was something they do all the time. Janet, the trainer was a true educator who is knowledgeable, funny and able to translate into common language how we can track our program income and expenses. I came away relieved to have gained so much information in such a short amount of time, provided by such reputable sources. Thank you for the work you do supporting non-profit staff/organizations!

Lois Schmidt said...

Thanks Deb, I agree with you. Nonprofits Assistance Fund folks have good sense in how-to's on these financial topics we all deal with. Glad you come!