Enhanced Management Strategies for Indirect Costs [SUBSCRIBERS-ONLY]

There are many aspects to consider when it comes to managing a nonprofit organization’s indirect costs. We often think first about compliance rules, which are naturally complicated and can vary by funding source and an organization’s own internal accounting policies and procedures. One aspect we tend not to emphasize enough is staff and their propensity to be disinterested and disconnected when it comes to considering and managing indirect costs.

To manage indirect costs effectively, we must raise staff’s understanding and awareness of indirect costs and sensitize them to the impact indirect costs have on an organization’s reputation, sustainability, and financial health. Simply stated, nonprofit organizations will appear in a better light when management and administrative (M&A) expenses are lower (where indirect costs reside), and program costs are higher. Staff can be your frontline source for effectively managing indirect costs.