Chartered Financial Analyst specializing in nonprofit finance and sustainability.
Determine how many donations or service units your nonprofit must achieve to cover its operating costs. Enter any three variables—Monthly Fixed Costs, Avg. Revenue per Unit, Avg. Variable Cost per Unit, or Breakeven Units—to solve for the fourth.
Nonprofit Breakeven Calculator
Nonprofit Breakeven Formula
The breakeven formula for a nonprofit finds the number of units (Q) (e.g., donations, services rendered) it must achieve for total revenue to equal all fixed and variable costs.
Q = F / (P – V)
Solve for Monthly Fixed Costs (F):
F = Q * (P – V)
Solve for Avg. Revenue per Unit (P):
P = (F / Q) + V
Solve for Avg. Variable Cost per Unit (V):
V = P – (F / Q)
Variables Explained
- Monthly Fixed Costs (F): Your total, recurring monthly operating expenses (e.g., rent, utilities, staff salaries, insurance).
- Avg. Revenue per Unit (P): The average revenue from one unit. This could be an average donation size or a fee for a service.
- Avg. Variable Cost per Unit (V): The direct costs per unit (e.g., payment processing fees, cost of materials for a service).
- Breakeven Units (Q): The total number of units needed to reach $0 (covering all costs) for the month.
Related Calculators
- Startup Breakeven Calculator
- Event Breakeven Calculator
- Contribution Margin Calculator
- Project Breakeven Calculator
What is a Nonprofit’s Breakeven Point?
For a nonprofit, the **Breakeven Point** isn’t about generating profit, but about achieving *sustainability*. It represents the minimum level of activity (e.g., donations, members, or services provided) required to cover all operational costs for a period.
**Fixed Costs (F)** are your organization’s overhead. These are the expenses you must pay every month regardless of your activity level. This includes staff salaries, office rent, utilities, insurance, and software subscriptions.
**Variable Costs (V)** are costs tied *directly* to a specific unit of activity. If your unit (Q) is “donations,” the variable cost (V) might be the 3% payment processing fee for each donation. If your unit is “meals served,” (V) would be the cost of food for one meal.
The **Contribution Margin** (P – V) is the amount from each unit of revenue that is available to pay down your fixed costs. This calculator helps you understand the minimum volume of support or services needed to keep your organization running.
How to Calculate Nonprofit Breakeven (Example)
Let’s calculate the breakeven point for an animal shelter based on donations.
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Identify Monthly Fixed Costs (F):
The shelter has $10,000 in monthly rent, staff salaries, and utilities.
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Identify Avg. Revenue per Unit (P):
The average donation from their campaign is $75.00.
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Identify Avg. Variable Cost (V):
The payment processing fee per donation averages $5.00.
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Apply the Formula: Q = F / (P – V)
First, calculate the contribution margin per donation: $75.00 (P) – $5.00 (V) = $70.00.
Next, divide the fixed costs by this margin:
Q = $10,000 / $70.00 = 142.86 -
Conclusion:
The shelter must receive 143 donations (rounding up) each month, at an average of $75, to cover all its operating costs.
Frequently Asked Questions (FAQ)
This calculator is simplest with one “unit.” You can either (A) calculate breakeven for *each* stream separately (e.g., “how many donations to cover costs”) or (B) calculate a weighted average (P) and (V) based on your typical mix of revenue.
Yes. All administrative and operational salaries (program managers, admin staff, leadership) that are paid monthly regardless of activity are **Fixed Costs (F)**.
It can be whatever you want to measure. Common units are: (1) Number of Donations, (2) Number of Members, (3) Number of Services Provided (e.g., “meals served,” “clients housed”), or (4) Number of Event Tickets Sold.
Enter your (F) (e.g., $10,000), (P) (e.g., $75), and (V) (e.g., $5). The calculator will show you need 143 donations (Q). If you also want to fund a new $5,000 program, add that to your Fixed Costs ($15,000). The calculator will now show you need 215 donations, setting a clear new goal.