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Starting and growing a non-profit takes a lot  of resources, and it involves a lot of different   types of expenses. But what about once you're  past that start up phase - what are the types   of expenses you might expect to maintain  or sustain the organization year to year   as you go forward? That's what I'm going to  talk about in this video: What are some of those   typical annual costs you can expect to have  for a non-profit organization once things are   up and running to keep things running smoothly.  Welcome or welcome back! My name is Amber Melanie   Smith. I'm a non-profit founder and executive  director of the nonprofit that I started.   I make videos here on YouTube to share all of the  things that I've learned, all the mistakes that   I've made, all of the tips and strategies  that I've picked up that have helped me   sustain my organization over time. So don't  forget to check out my other videos if you are   interested in topics like starting a non-profit,  fundraising, making a social impact in other ways,   social enterprise, etc. Also don't forget to give  this video a like - it helps this channel grow, it   helps YouTube share this video! And subscribe to  my channel of course. And if you're interested in   learning more about me and some of the work that I  do as well as getting some resources to help you,   check out my website FounderToFullTime.com. So  this topic of annual expenses I find to be really   helpful to understand even when you're in the  start up phases of a non-profit organization,   because you want to know what it's going to take  to keep your organization going year after year.   So I won't be specifically talking about the costs  associated with starting up a new non-profit,   but I do have another video for that if that is  the topic you're interested in check that out   it is starting a non-profit startup cost to  budget for and if you have not yet had much   experience creating a non-profit budget, I have  another video for that. Check out my other video   how to create a budget for beginners. I hope  that helps you lay the groundwork so that you can   plan for the future all right so let's get  into some of these typical annual expenses i   want to start out with a disclaimer that  these typical costs are going to vary   widely based on your nonprofit's specific scope  and mission for example if your non-profit has um   it's dealing with an issue  surrounding uh housing or shelter or   perhaps as even an animal rescue you might have  different types of facility costs than other   nonprofits or for another example organizations  dealing with advocacy or justice or legal   missions might have different types of expenses or  even medical causes might have different types of   expenses related to the types of professionals  that you need to hire and recruit and pay in   order to complete your mission so in summary these  costs are going to vary so just keep that in mind   what i'm going to talk through is just some of the  typical costs that most non-profits are going to   have to account for in their annual budgets each  year the first category i'm going to talk through   is direct costs these are the expenses that are  directly tied to the delivery of your nonprofits   programs the first type of cost i'm going to share  is equipment materials or supplies related to   your nonprofit specific projects or programs  and these are probably the category that will   vary the most widely non-profit to non-profit to  give you a sense of what i'm talking about here   i'm going to share a couple of examples from some  typical types of organizations so for hunger or   food insecurity non-profits some possible  equipment or supply costs might include   actual food refrigeration or storage systems  packaging shelving gloves sanitation trucks   there could be a number of things that you need in  order to perform whatever your specific mission is   related to food insecurity animal rescues as  an example you've got pet supplies you've got   housing for the pets you've got you know crates  and food for the pets and all sorts of supplies   you might imagine would go with uh housing uh  rescued animals health clinics you've got medicine   diagnostic equipment things that you might find  in a nurse's office education organizations this   might be thing like things like technology that  the students are using or even school supplies   the next cost and this of course also depends  on your mission is you might have costs for   those facilities the rent or the mortgage  on the actual building that you're using to   house people or store food or house animals  whatever it might be the next cost that's a direct   cost is staff that runs your programs a common  misconception is that any kind of staff no matter   what they are doing is considered an overhead  cost but that is not true if staff is working on   programs they are spending their time on programs  that is a program or direct expense examples   might include a program director or a volunteer  coordinator or depending on what your organization   does it could include roles like teacher or doctor  or social worker and then another direct cost is   technology technology specifically used for  things to run your program so this could be   the volunteer management software that recruits  the volunteers who runs your programs it could   be databases or inventory management systems  where you're tracking your inventory of supplies   the previous thing that i mentioned so those  are just some of the key direct costs that your   organization can expect to have year after year so  outside of those direct costs you also have what's   called indirect costs indirect costs are also very  important and even though these indirect costs   might not be the costs associated directly with  program delivery they are required for you to pay   them in order to keep your organization running  and compliant with the law and i smile a little   bit as i talk about that because there's a common  misconception i've talked about in some of my   other videos about overhead and this idea that  overhead is bad and you shouldn't have very much   of it but unfortunately nonprofits have to have  these expenses to keep their lights on in order to   not get shut down by the government so um you know  there's a lot of dialogue in the nonprofit world   over the past several years about how to help  people understand what overhead actually is   and how it's a necessary required part of  running an organization to keep things going   all right so envirant let's talk about some  of those indirect costs the first is staff   specifically that are dealing with the  administrative or fundraising aspects of your   organization so this might include your executive  director administrative assistant fundraiser grant   writer HR or operations manager roles like that  now you might be asking what happens if you have   one staff person who is splitting their time  among lots of different things sometimes even   program or direct cost related things that is a  very common thing i know that i have that in my   own organization and you simply estimate the time  spent between the different activities and that's   how you'd classify that person's salary another  indirect cost is employment or payroll taxes   speaking in particular from the united states you  know whenever you have any kind of paid staff you   as the employer are expected to pay a portion of  those payroll taxes the employee pays a portion   and the employer pays some too and you'll also  want to look up based on what state you are in   what the specific rules and percentages around  that may be because it might vary so to be able   to predict and budget for these costs check  that out it's usually some percent of the   total annual salary of of your combined staff  another indirect cost is fringe benefits these   are benefits that your paid employees get  such as health insurance dental insurance   retirement contributions etc. the amount that you  would be expected to budget for will vary based   on how many staff members you have what kinds of  fringe benefits are you providing and of course   what level of contribution are you as the employer  providing for example are you paying for half of   the health insurance or all of it or some other  percent so it could be a couple hundred dollars   per month per employee really depends on what you  got going on another indirect cost is your rent or   office space if you have that this could be  anywhere from a couple hundred to several   thousand dollars a month depending on the size of  the space the number of people you have using the   space and of course where you are located another  indirect cost is insurance and you might actually   be surprised to learn just how many kinds of  insurance non-profits typically need to have   to name a few you've got short and long-term  disability you've got workers compensation   you've got general liability you've got directors  and officers insurance to protect your board of   directors from liability if something bad happens  with your organization you've got volunteer   accident insurance i think that might be all of  the ones i had in mind in other words it can be   a lot so just be prepared for that and each one  of those could be a couple hundred to several   thousand dollars per year and again based on your  organization's mission you might have other types   of things like insurance on a facility that you  are using or that you own technology is another   indirect cost and there are lots of different  types of technology that i'm referring to   obviously your website you've got your domain name  that you pay for and your hosting fees for that   then you've got other software you would  possibly have a fundraising platform or a donor   CRM so you can track your donor relationships  and facilitate making those asks every year   you might have a program evaluation system you  might have a project management tool that your   team uses to stay on top of tasks efficiently  another technology like accounting like   QuickBooks or something to manage your bookkeeping  speaking of accounting another indirect cost is   accounting and bookkeeping services if you are  not doing this yourself you might be outsourcing   this so that is an expense but even if you are  doing your own bookkeeping in house you might pay   an accountant to do the annual tax filings  that you're required to do as a non-profit then   inevitably you're going to have some costs  associated with your fundraising activities   whether you are hosting events or seeking  individual donations which could include a cost of   you know sending out mail or even more technology  that you need to bring in those donations   could be lots of different types of expenses under  the umbrella of fundraising finally you've got   your legal permits and required annual filings and  i mean the fee to actually file them not just the   fee to pay someone to do that for you but the  actual filing costs in the united states this   includes depending on the state that you're in you  might have a charitable solicitation license that   you need to renew this allows you to continue  to have permission to ask people for money so   it might vary state by state make sure you look up  what the specific things you need to file in your   state if you're living in in the united states  check what those things are in your state so that   you can be sure to stay in compliance failure  to stay in compliance could result in penalties   or fees or worst case scenario having your whole  organization shut down so it's really important   to stay on top of these things and make sure that  you're sending in the filings when you're supposed   to so those are typical annual direct and indirect  costs i'm also going to give a couple more things   an honorable mention here because i think that it  would just be really smart for organizations to   invest in these things year to year the first is  some kind of professional development or training   item in your budget making sure that your  staff is always in the know about more   effective and efficient ways to do  the great work that they're doing   that they are learning constantly and bringing  that knowledge back to the work another thing   might be memberships to other organizations  or associations in your community community   that might help you further your mission one  example could be your local chamber of commerce   if your nonprofit can join the chamber then  it can possibly network with other businesses   or other non-profits that can lead to greater  awareness about your cause or possibly increased   donations and finally and this might go under  fundraising expenses that i mentioned previously   but investing a little bit of money every year in  what's called donor stewardship which is how you   develop and strengthen and maintain your  relationship with your current donors after   they've made the first donation so that hopefully  they will continue to support your cause year   after year so that might just include some simple  costs like um stamps or thank you notes things to   you know keep you top of mind to communicate  with these folks okay so i think that that   basically covers um most if not all of the the  just typical annual expenses you might see on   a non-profit's budget across most non-profit  organizations did i miss something that you have   in your budget i'd love to hear about it share  in the comments below as i mentioned before if   you're looking for a little bit more information  or trainings i've got some available on my website   foundertofulltime.com. I also have a newsletter  that i send out with additional resources and   sometimes even grant opportunities that i  come across it's all for non-profit leaders   and change makers the link to subscribe to that  is in the description in this video as well so   feel free to check that out and join if you're  interested finally and you probably know it's   coming if you've seen my other videos but i have  a facebook group called change the world or bust   where we've got a couple thousand folks in there  from all around the world talking about how we're   all making an impact so i encourage and invite you  to join in on that and i hope to see you there and   i hope to see you next time. Thank you so much  for watching and hope you have a great day!