Nonprofit Sector

Supporting the Everyday, Every Day

January 30, 2019

Even on a good day, many nonprofits face constant challenges to providing programs and services to their communities. When nonprofits struggle to pay for day-to-day operating expenses, mission delivery becomes nearly impossible. Operating expenses include line items such as staff, rent, technology, professional development, and supplies. Funders are increasingly realizing the importance of including provisions for operating costs in their grantmaking strategies.

NFF would like to thank MUFG and PNC Foundation for recognizing the importance of operating support and providing us with general operating grants so that we can continue to work toward creating a more just and vibrant society.

But operating expenses are just one piece of a larger puzzle. For a nonprofit to be financially resilient and adaptable, it must be able to cover its costs. 

Day-to-day operating expenses +
Working capital +
Reserves +
Fixed asset additions +
Debt principal repayment 

= Full costs

In the 2018 State of the Nonprofit Sector Survey, 57 percent of respondents listed obtaining funding for full costs as one of their top operational/financial challenges. This type of support is critical for nonprofits to maintain uninterrupted service delivery, even during times of crisis or transition, which in turn leads to healthier, stronger communities.

“When nonprofits are able to cover their overhead with flexible funding, they do better work for communities; fund overhead, and we will have the healthy, resilient nonprofit sector we need to make real social change.”

Claire Knowlton, Director, NFF Advisory Services

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