When a nonprofit should do something that costs money, but doesn’t have money to cover it, that’s an unfunded expense. Unfunded expenses – and their cousin, underfunded expenses – commonly show up as overworked and underpaid staff, and their effects can harm workers, clients, and the nonprofit sector broadly. Both funders and nonprofit leaders should seek to understand what it really takes to accomplish their grantees’ goals – and be honest with one another about what that looks like. Learn how to approach funding challenges and create greater outcomes for communities, staff, and the social sector.

Nonprofit Finance Fund’s Full Cost video series is the newest addition to its Full Cost resources, a collection of tool and articles for naming and claiming all the financial resources it takes to run an effective organization for the long haul.

Full Cost concepts can:
- Inform more productive conversations between nonprofits and funders about getting paid fairly to do the work.
- Support financial health and planning by making a clear distinction between revenue and capital funding.
- Advance racial equity for nonprofits and the communities they serve by shifting funding conversations from power to partnership.
- Provide a framework for greater financial health by understanding the different types of costs nonprofits incur and how they fit together to support strong organizations.

Check out all of NFF’s Full Cost resources at nff.org/full-cost.

00:00 What is an unfunded expense?
00:25 Covering unfunded expenses
00:43 Unfunded and underfunded expenses explained
00:51 Sweat equity, not employing enough staff, not paying living wages
01:30 Full Cost addresses unfunded expenses
02:20 Talking to funders to address expenses
02:49 Learn more

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