The Cost of Meeting Compliance: A Case Study of Challenges,Time Investments, and Dollars Spent

Management, especially how it relates to staff time investments tracking outcomes and reporting results, is not clearly understood across the nonprofit sector (Gawande & Wheeler, 1999). To date, there is no systematic study that examines investments made by nonprofit staff to meet funder compliance. Recently, the Stanford Project on the Evolution of Nonprofits (SPEN) at Stanford University completed a two-year investigation of nonprofits in the Bay Area and found that many funders differ in their demands for meeting compliance, which created conflicting demands (Gammal, Simard, Hwang, & Powell, 2005). However, the study did not examine the amount of time nonprofit leaders spend on such activities or how much of the funding resources are used toward such activities. Thus, both nonprofits and funders alike have not been able to quantify, in dollars, how much is invested in meeting compliance. To address this gap, The Forbes Funds commissioned Sandraluz Lara-Cinisomo to conduct a research case study of one Pittsburgh-area nonprofit to determine how the organization makes staffing decisions and carries out compliance-related activities; how much time is invested in these tasks; and how this time translates into dollars spent.