Full Cost Project

@fullcostproject   #fullcost   #impactnotoverhead

Click here for The Full Cost Project website.


In April 2015, Northern California Grantmakers, San Diego Grantmakers, and Southern California Grantmakers announced the Full Cost Project, a statewide initiative to increase the number of funders that provide real-cost funding -- that is, whose grantmaking decisions are informed by all of the costs necessary for nonprofits to deliver on their missions and be sustainable over time.

Instead of focusing on nonprofit "overhead," the Full Cost Project encourages a focus on outcomes and the role funders want their grant dollars to play in achieving those outcomes.

Real Objectives

The Full Cost Project is both a “will building” and “skill building” initiative guided by the consulting agency Social Sector Partners that consists of two phases:

Phase 1

The objective of Phase 1 is to raise awareness about the need for real cost funding, identify the barriers to this practice, and determine solutions for overcoming those barriers.

In early 2015, Social Sector Partners conducted a review of academic research and qualitative focus groups with members of NCG, SCG, and SDG. A summary of these efforts is available in the report Overhead Madness: A Look at Grantmaking Policies and Practices in Funding Real Costs in California (July 2015).

Four forums were held in order to provide funders with information about the need for real cost funding and gather their feedback about the barriers to this practice and potential solutions for overcoming them: San Francisco (June 9), Los Angeles (June 15), Orange County (June 19), and San Diego (June 23). A second report, Real Cost Project: Barriers to Change (January 2016), summarizes the feedback gathered during these regional convenings.

On January 12, 2016, SDG hosted an invitation-only briefing for CEOs based on forum feedback that barriers to real-cost funding often start with organizational leadership.

Read the final Real Cost Project Phase 1 Report.

Phase 2

Building on these series of lively exchanges across the state, Philanthropy California was able to articulate the idea behind a movement that has been steadily gaining prominence in our field: by changing the way grantmakers fund nonprofits right now, we can fundamentally improve their ability to achieve our shared goals.

That’s why we are thrilled to host a suite of groundbreaking trainings for both funders and nonprofits to support practical and big-picture cultural shifts needed to make this change. Over the next 12 months, national thought leader Nonprofit Finance Fund will help to lead workshops throughout the state that will set a clear understanding of the role Full Cost practices play in achieving sector outcomes, and the true costs of building resilient nonprofit organizations. Together we will unpack the key elements of why - and even more importantly, how - to go about Full Cost funding.

We hope you will participate in our local workshops and we encourage interested members to check out resources and news on our Full Cost Project website, and join the conversation on Twitter @FullCostProject.

In the News

In November 2015, the Los Angeles County Board of Supervisors unanimously approved the creation of a local process for reimbursing the nonprofits with which they contract for indirect costs (a.k.a. overhead) in a manner consistent with the federal government's OMB Uniform Guidance, which took effect last year. The action followed the release of the Urban Institute report, Nonprofit-Government Contracts and Grants: California Findings, that highlights the significant problems California nonprofits face when managing multiple government and private contracts and grants, including routine underpayment of the full cost of the work.

By Funders, For Funders

The Full Cost Project is being funded and guided by an Advisory Council of grantmakers that are committed to the practice of real cost funding.

Part of a National Movement

The Full Cost Project joins a number of other nonprofit and philanthropic sector efforts around this topic throughout the country:

  • The Nonprofit Overhead Project, an initiative led by CalNonprofits to educate nonprofits about how to adequately budget – and ask for funding for – the full cost of providing services. The Full Cost Project is coordinating with this effort intended for nonprofits to ensure that both projects inform one another.

  • The Overhead Myth, an initiative led by GuideStar, BBB Wise Giving Alliance, and Charity Navigator

  • Real Talk About Real Costs, an initiative of Forefront (formerly the Donors Forum of Illinois). Watch their short video "If We Want Our Funding to Change the World".

  • #OwnYourOwnCosts, an initiative of the National Council of Nonprofits

  • The recent 2015 GEO report, Is Grantmaking Getting Smarter?, has a specific section on how grantmakers are increasingly supporting nonprofit resilience through the provision of operating support