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Navigating Joint Cost Allocations: Top Five Mistakes to Avoid

(Jan. 12, 2011) Perlman & Perlman LLP, attorneys specializing in nonprofit law, have developed for AFP members a brief that aims to demystify the process of joint cost allocations.

Joint cost allocation, a methodology for allocating the costs of fundraising activities when conducted together with program or management activities, is one tool that organizations can use to allocate as program expenses the portion of fundraising activities that are attributable to program accomplishment. Unfortunately, joint cost allocation methodology is frequently misunderstood and misapplied due to its complex requirements. This explains what joint cost allocation is, why regulators and watchdogs are concerned about it, and the top five mistakes that charities make when allocating costs of joint activities.

Download the article in PDF form in the Attachments section below.

Perlman & Perlman LLP, based in New York City, specializes in working with the philanthropic community, among other areas of legal practice at the local, state and federal level. Perlman & Perlman is AFP's outside legal counsel. You can find the firm online at


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