Why would a nonprofit organization need to count the cost of services provided?
The word "service" is often perceived in the social sphere as something commercial. Today we will debunk this myth and look for motives to engage in calculation. First of all, it should be said that any of our activities can be viewed through the prism of services. Here are some examples in which you can safely find yourself:
  • 1
    Social services: organizing support and assistance to people in need, including children, the elderly, the disabled, the homeless and other vulnerable groups. Each type of help and support can be considered as a separate type of service.
  • 2
    Educational services: organization of courses, seminars, trainings, lectures and other events aimed at improving the qualifications and developing the professional skills of participants. Here are all our schools, webinars, gas pedals and so on.
  • 3
    Cultural and entertainment services: organization of festivals, concerts, theatrical performances and other events that contribute to the cultural development of society, and not only. Such events can improve the quality of life of our beneficiaries and solve additional socialization tasks.
  • 4
    Environmental services: organization of environmental protection work, including landscaping, garbage collection, environmental events and so on.
  • 5
    Health care: organizing the provision of medical services, including medical consultations, diagnostic and treatment procedures, and ensuring the availability of medicines.
The easiest way to answer the question - what services do I provide? - is to look at what area of grant competitions you are applying for. And then you can develop this topic further.
Okay, we have defined the directions and the list of services. Let's see why we need to calculate the cost of provision.
First and foremost, we need this information to work with donors. Thanks to accurate calculations, we can give the donor a clearer idea of what the money is needed for and how it will be spent. In this way we can build trust, not only among donors, but also among our beneficiaries.

Further, the cost of services is used in budget planning and also allows us to optimize time for budgeting and approval. As the organization has a clearer picture of the costs associated with providing these services.

Understanding the cost of services helps the organization to manage its resources such as time, staff and equipment more effectively.
As well as assessing its performance and seeing more clearly what services are valuable to clients and donors. Over time, an organization will begin to maintain its effectiveness if it continuously monitors the value of its services and responds to external changes.

Another motive is to be able to assess its competitiveness in the service market and learn what services are provided by competitors compared to their own.

The focus of the organization can be on both improving the quality of its services and understanding the needs of its clients, which can be continuously adapted to meet those needs.

By calculating the value of its services, a nonprofit organization can determine the value of its activities and see how they relate to its mission and goals.
Overall, costing is an important tool for nonprofit organizations to manage their operations more effectively, build trust among donors and clients, improve service delivery, and achieve their mission and goals.
Showing information about the cost of a nonprofit organization's services openly (e.g., on the website and social media, as well as in annual reports) can be useful for attracting donors, potential clients, and partners. This can help increase the transparency of the organization's activities and build public trust.

However, it is not always necessary to publish information on the cost of services openly. For example, where the cost of services depends on the specific requirements and needs of beneficiaries. If your audience is not ready for this information - then don't forget to show specific results for each program. For example, how many people were helped, what percentage of them achieved specific goals, and so on. This information can help you understand how important the organization's work is and how donors can help the organization continue its work.