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What Does it Really Cost to Provide Your Services - Understanding and Communicating Administrative, Indirect, Shared, and Overhead Costs


What do the terms “administrative, indirect, shared, and overhead” have in common besides inducing mind-numbing anxiety. Unfortunately studies now reveal that within our nonprofit sector and among funders, these terms have multiple contradictory definitions and one common characteristic - suspicion. Funders, charity rating systems, board members, and sometimes even CEO’s share a common assumption that these costs (whatever they are) threaten the mission of our organizations by draining resources away from our vital services. Unfortunately, many nonprofits have responded to the perceived “badness” of these costs by making them invisible (or blurry) and underinvesting in essential management and infrastructure.

Learning Objectives:

This webinar will help your organization clarify what it is actually spending to deliver each of its services, including the fair share of organization management and overhead costs that are essential to being able to operate any services. Topics will include:

  • Determining current costs for organization-wide management and overhead costs

  • Cost allocation options - figuring out the fair share of admin and overhead costs which should be attributed to each program

  • Communicating about management and overhead costs with staff, boards, and funders

  • Streamlining cost allocation approaches for budgeting, contract negotiation, accounting, and reporting


Kay Sohl has provided training and consultation for Executive Directors, CFOs, and Boards of Directors of over 6,000 not-for-profit organizations throughout the United States. Kay focuses her work on rethinking nonprofit strategies for financial sustainability, Board financial oversight, compliance with federal funds management requirements, and the challenges of nonprofit accounting and financial reporting. She is a frequent presenter for state and regional coalitions of nonprofits, and continuing professional education programs for attorneys and accountants serving the nonprofit sector. She has worked extensively with sexual assault and domestic violence organizations for over 30 years.

Recording and Materials

Reviewed: April 7th, 2016