Nonprofit organizations can receive restricted funds unexpectedly or they can appear after many years of acquisition efforts. They can be fresh (just arrived) or mature (been sitting around for years). Spending patterns for restricted funds is also constantly changing. Consequently, it is important to periodically pause and take an “inventory” of restricted funds in order to assess the timing and future use of this valuable resource.

Our recent article on the Challenges of Accepting Non-Full Cost Funding prompted compelling and thoughtful comments on the universal problem of non-full cost funding in the nonprofit sector. Many commented that non-full cost funding is a systemic problem that fuels marginalization of the communities, causes, and peoples we serve. To right this wrong, we must draw attention to these problems and advocate for change. Indeed, real sustained effectiveness cannot be achieved if this harmful funding culture continues.

Most nonprofit organizations are confronted with an unfair choice each year: accept or not accept critical funding that is inherently designed to not cover the full cost of programs and activities for which the funding is provided. This reality has been around for a long time. Looking to the future, we must actively push funders to recognize that sustainability will be damaged if nonprofits continue to be forced to compete for, and pressed to accept, non-full cost funding.