Understanding the Full Cost of Social Impact: A Funder + Grantee Pilot

A key strategy in this initiative is to support skills building for nonprofit executives and funders to allow them to accurately account for full costs, clearly identify those costs, and discuss funding mechanisms that allow nonprofits to receive funding that takes those costs into account. To implement this strategy, the Weingart Foundation, California Community Foundation and Nonprofit Finance Fund developed the Full Cost Funder/Grantee Pilot. This report summarizes the findings of Harder+Company’s evaluation of the pilot and elevates considerations for the future implementation and scaling of this and similar initiatives.


Increasing the Impact of Philanthropy in California, August 2016

Around the country, as well as across the State of California, grantmakers are examining their funding practices and looking to develop new approaches to better support the communities they serve. Recently, numerous grantmakers have begun exploring what it would take to fund the real costs of the organizations they support – that is all of the necessary investments for a nonprofit organization to deliver on mission and to be sustainable over the long term. Building off of this interest, Northern California Grantmakers, San Diego Grantmakers and Southern California Grantmakers launched a joint statewide initiative – the Full Cost Project – to increase the impact of philanthropy across California. 

Barriers to Change  

In June 2015, representatives from more than 150 different foundations as well as government agencies and individual philanthropists participated in the Regional Forums help across the state of California to understand the barriers that were stopping grantmakers from adopting new practices. A new report, “Real Cost Project: Barriers to Change“, reveals common themes that surfaced from these forums and reflects the issues that participants viewed as the most relevant and urgent. Simultaneously, partners at California Association of Nonprofits held similar forums with nonprofit audiences around the state and a summary of these findings are included in the appendix.


Overhead Madness

The critical first step of the Full Cost Project was to collect information and baseline data on the spectrum of current funder and sector practices that relate to real cost funding. This research allowed for a more thorough conceptualization of real cost funding as well as an opportunity to understand existing challenges, gaps, and needs. Most importantly, the research set a foundation for how future discussion and trainings should be developed to suit the real needs of practitioners in the field.