Beginning your Full Cost Journey
The full cost framework provides a model for nonprofits’ long-term sustainability, which includes immediate needs as well as future planning. Often organizations find that their full cost budget is significantly larger than their annual operating budget. This is normal, and a full cost budget can take time to build, especially for smaller and more resource-constrained organizations.
As you begin your full cost journey, keep these three practices in mind:
- Budget for and fund annual surpluses and debt repayment. NFF has a suite of budgeting resources, including a template for budget and scenario planning.
- Adopt full cost as an ongoing budget practice when requesting and providing funds (specifically unfunded and underfunded expenses, cash flow needs, and long-term planning) to build more sustainable programs and organizations.
- Foster open communication and collaboration. NFF’s full cost communication guide offers tips and examples with common scenarios.
Explore NFF’s full library of resources for more practical tips and nonprofit financial management knowledge.