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To download sample and template files, please visit the online version of the Cost Toolkit at [www.bridgespan.org/nonprofit-cost-analysis-toolkit-introduction.aspx](www.bridgespan.org/nonprofit-cost-analysis-toolkit-introduction.aspx or use the live links found)[ or use the live links found](www.bridgespan.org/nonprofit-cost-analysis-toolkit-introduction.aspx or use the live links found)[ ](www.bridgespan.org/nonprofit-cost-analysis-toolkit-introduction.aspx or use the live links found)[throughout this document. Please send any questions about or suggestions for the Cost Analysis](throughout this document. Please send any questions about or suggestions for the Cost Analysis)  \nToolkit to [info@bridgespan.org](info@bridgespan.org)  \n2  \nIntroduction  \nWhy cost analysis?  \nAlthough nonprofits generally have a good understanding of their revenues, knowledge about costs can sometimes be less robust. This is particularly the case when it comes to the true, all-in costs of providing services, running programs, and otherwise operating the organization.  \nLacking this information, nonprofit executives often must make important resource-related decisions on the basis of intangibles such as intuition, the skills and knowledge of the program staff, or the preferences and inclinations of the organization’s funders. As a result, they run the risk of undermining their organization’s mission (however inadvertently) by failing to allocate resources to the most appropriate programs and services. Given the limited resources available to nonprofits (especially during financially challenging times), gaining economic clarity around costs is critical to inform key strategic decisions.  \nRead more in “Costs Are Cool: The Strategic Value of Economic Clarity,” by Susan Colby and Abigail Rubin.  \nWhat is true-cost analysis?  \nAn effective true-cost analysis accurately allocates direct as well as indirect costs across focus areas such as programs, geographic sites or particular products, allowing nonprofit leaders to make more informed decisions about strategy and funding.  \nMost organizations have a good understanding of the direct costs incurred by each of their programs. But since traditional accounting breaks down indirect (or overhe","cbCaid827Gy3WYdo","https://ap.wps.com/l/cbCaid827Gy3WYdo","pdf",361695,41,"English","# Introduction\n## Why cost analysis?\n## What is true-cost analysis?\n## Who should use cost analysis?\n## How do you actually do it?\n## The six-step cost analysis process","[{\"question\":\"Why do nonprofits need cost analysis in addition to revenue understanding?\",\"answer\":\"Nonprofits may have strong revenue knowledge but weaker insight into the true all-in costs of running programs and operations. Without cost clarity, leaders risk making resource decisions based on intuition, potentially undermining mission outcomes.\"},{\"question\":\"What does true-cost analysis do differently from traditional accounting?\",\"answer\":\"True-cost analysis allocates both direct and indirect costs across focus areas like programs, geographic sites, and products. Traditional accounting often assigns indirect costs by functions (e.g., administration), which obscures how overhead connects to activities and program financial health.\"},{\"question\":\"Who is this toolkit intended for?\",\"answer\":\"It is primarily designed for senior leaders at small to medium nonprofits with multiple program areas or multiple geographic sites. It may also support leaders of larger nonprofits where this knowledge is not already internal, and can be useful for foundations assessing grantees’ true-cost structures.\"}]","Nonprofit Cost Analysis Toolkit - Six Steps to Finding the True Costs of Programs | PDF",1789157575]