What are considered Administrative Expenses for a nonprofit?
I'm the secretary of a nonprofit Community Concert Association. I'm currently applying for grants/supplemental funding. Our entire budget is between $19,000 - $20,000. A question on one of the applications states: What percentage of the money you raise goes toward administrative costs?
We pay no salaries. We contract with an agency for our performers. We pay for some High School technical assistance at concerts since we hold our concerts in the auditorium of the High School. We have flyers with season concert information printed and additionally send out a mailing with those and some other information once a year. We pay postage to mail those and then to send members their season tickets. We pay for liability insurance. I'm not sure what comes under the hearing of "administrative expenses" for our Association. Can you offer any guidance as to what I should put as administrative costs?
The information below is copied directly from the CFR (Code of Federal Regulations) information provided on the Cornell University Law School website. Read below or access the site here.
(b) Administrative costs are the costs associated with:
(1) Performing general administrative and coordination functions, including:
(i) Accounting, budgeting, financial, and cash management functions;
(ii) Procurement and purchasing functions;
(iii) Property management functions;
(iv) Personnel management functions;
(v) Payroll functions;
(vi) Coordinating the resolution of findings arising from audits, reviews, investigations, and incident reports;
(vii) Audit functions;
(viii) General legal services functions;
(ix) Developing systems and procedures, including information systems, required for these administrative functions;
(x) Preparing administrative reports; and
(xi) Other activities necessary for general administration of government funds and associated programs.
This is just a guide, and does not constitute advice. You should seek the advice of a qualified tax professional.