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Plain-English guide · for nonprofits
What does a program really cost?
Updated September 2026
Most nonprofits can say what they spent. Far fewer can say what one program cost, because the biggest cost, people's time, never gets counted against the work it served.
A program's true cost has three parts: the direct money you spent on it, the paid staff time that went into it, and the volunteer time that kept it running. Most orgs can name the first, estimate the second once a year under deadline, and never count the third. Two of those three are accounting numbers. The volunteer figure is a management number, and knowing which is which keeps you out of trouble.
The three parts
Direct costs
Supplies, rent for the space it uses, mileage, contractors. The easy part, because receipts exist.
Staff time, at real pay
The hours your paid people put into the program, times what those hours cost you. This is usually the largest number and the least tracked. If you hold federal money, staff whose pay is charged to federal awards need records that accurately reflect the work performed, under 2 CFR 200.430(g). Those records cover all of that person's paid time, not just the grant hours, but that is still narrower than tracking everyone against every program, and the rule does not prescribe a timesheet format, so read your award terms and ask your pass-through what they expect.
Volunteer time, at a defensible rate
Unpaid hours are still capacity the program consumed. Value them at a rate you can defend. Our volunteer hour value calculator starts with Independent Sector's national value for a volunteer hour and shows when skilled work can use a higher rate.
Why the number matters
Because every serious question about a program runs through it. Which program stretches a dollar furthest? Is the new grant worth the work it demands? What should you ask a funder for next year, with a straight face? A reach number without a cost number is half a story, and funders have read a lot of half stories.
It also protects you. A program that looks cheap because nobody counted the director's Tuesdays is a program that quietly burns out a director.
How to build it without a finance degree
Track time by program as it happens
Weekly, in minutes per person, against each program plus admin and fundraising. Reconstructing a year of hours in January is the method that fails.
Add rates once, not per report
One cost rate per person, applied to their approved hours. A raise changes the rate going forward, never the past.
Count volunteer hours the same way
Same programs, same weeks. Paid and unpaid time land against the same work, and the full picture appears on its own.
Put direct costs in the same buckets
When money and time share program categories, the true cost is a report, not a project.
This is general information, not legal or accounting advice. Federal grant rules change and are applied differently by different agencies and auditors. Check with your auditor, your grant officer, or an attorney before relying on any of it.
The Ember tool for thisEmber Time
Ember Time lets your team log time by program, and you approve the week. Approved hours for hourly staff become each program's staff cost at the rate you set. Unlimited users on every tier.
Sources: Method content. Volunteer rates: Independent Sector, Value of Volunteer Time; 2 CFR 200.306. Federal time-and-effort context: 2 CFR 200.430.