NCN works with clients in a variety of ways, including though coaching. Recently, I worked with a group who was developing a full cost budget for their space for the first time. When you’re doing this kind of work, you need a few concepts in your back pocket. What’s a full cost budget? That’s a budget that looks at the entire picture of an organization, not just a portion of it. It includes all of the unsexy overhead costs that we need to be effective, like liability insurance, cleaning, grounds maintenance, and more. All too often in the nonprofit sector, we only look at what it costs to run a particular program, and we ignore all the other costs that aren’t up front. One concept you need is the idea of direct costs vs. indirect costs. Direct costs are those expenses that you need to spend for a specific purpose. If you’re making a meal, the tomatoes, pasta, meat, and spices are your direct costs. However, your meal won’t be very flavorful if you dump them into a pot uncooked. You need a stove in a kitchen with running water. Not to mention plates and forks! All these other things should be accounted for as “indirect costs” because you need them for making all your meals, not just your delicious pasta.