Joint expenses – Allocating program and fundraising costs

Description

Abstract: In recent years watchdog groups, the media and others have tightened the screws to make sure nonprofits are spending more money on core programs and less on administration and fundraising. Thus, nonprofits have an incentive to report that they’re doing just that. But there’s something nonprofits must keep in mind: Accounting rules require that the full cost of any activity with a fundraising component be shown as a fundraising expense, unless certain criteria are met. This article explains that distinction.