Ask a CFO with James Vanreusel – Calculating Cost per Beneficiary for Non-Profits
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In this episode of “Ask a CFO,” James delves into the concept of unit economics and how non-profit organizations can effectively calculate the cost per beneficiary. He explains that this can be done in several ways. James also explains why it is important to calculate the indirect cost rate. Finally, he discusses whether there is a minimum or maximum cost per beneficiary.
The episode provides valuable insights into leveraging unit economics to improve the effectiveness and sustainability of non-profit programs.
Key takeaways:
- Cost Per Beneficiary: Simple calculation by dividing the total budget by the number of beneficiaries.
- Program-Specific Costs: Unit cost calculation for each program, including direct expenses and salaries.
- Indirect Cost Rate: Importance of building this in detail with audited financials.
- Cost Guidelines: Discussion on minimum and maximum cost per beneficiary.