Nonprofit

Divide and Conquer: How Joint Cost Allocating Works

Your not-for-profit likely feels pressure to prove that it dedicates most of its resources to programming. However, accounting rules require that you record the full cost of any activity with a fundraising component as a fundraising expense. The exception is when an expense meets three joint activities criteria: purpose (the activity is intended to achieve a program purpose), audience (the audience isn’t primarily donors) and content (the activity supports programs). If your activity satisfies these, you can allocate costs between fundraising and other functions.

Read full article here.