The full cost framework helps address resource disparities in the social sector by taking a holistic view of finances to understand long-term needs and outcomes.
All too often, common funding practices and mindsets have worked against financial resilience by reinforcing power imbalances and restricting funds, all of which contribute to nonprofits operating without adequate resources. In order to keep the work going, nonprofits end up underpaying staff, working long hours, offering low or no benefits, or foregoing paychecks altogether.
The full cost framework advances more equitable funding practices by:
- Fostering conversations and actions that build wealth in communities by improving how money flows.
- Transforming traditional power dynamics between funders and nonprofits into collaborative partnerships.
- Shifting from distinctions between indirect and direct costs to the more flexible concept of unrestricted funding, which allows organizations to leverage their resources most effectively to address the diverse and evolving needs of their communities.
The full cost framework informs budget asks and funding decisions that create a more resilient and impactful social sector.
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