Joe Patti recently published a terrific pair of articles from his Info you Can Use series that are well worth your time. Know Your Funding Rights examines a nonprofit’s right to apply overhead expenses to program costs for grant applications and his follow-up post, Figuring Out True Program Cost, is geared toward helping groups get back into the habit of generating accurate expense reports for grant applications (hint: the key word there was “back”).
Although most grant makers have always been prickly about allocating funds to overhead, they’ve been particularly adamant about it over the past decade. As a result, many nonprofits (including those in the performing arts) have had to fudge program expenses when making grant applications.
In short, the grant making community has indirectly (or directly depending on your perspective) contributed to decades of performing arts orgs cooking their books; perhaps that’s a strong phrase, but there’s certainly a good bit of blanching, broiling, and braising going on.
Perhaps unsurprisingly, this has almost certainly had an adverse impact on contributing to secrecy within an already transparency adverse field so I strongly recommend not only setting aside time for both of Patti’s articles but be sure to share them with colleagues and board members.