Nonprofit Cost Sharing Agreement

Nonprofit organizations often collaborate with other organizations or government institutions to achieve their goals. One way to do this is by entering into a cost-sharing agreement. A cost-sharing agreement is a contract where two or more parties agree to share the costs of a specific project or activity. In this article, we will discuss what a nonprofit cost-sharing agreement is, how it works, and the benefits it offers.

What is a Nonprofit Cost-Sharing Agreement?

A nonprofit cost-sharing agreement is a legal document that outlines the financial and resource commitments of two or more nonprofit organizations. This agreement is usually entered into when the organizations want to collaborate on a project or activity that requires resources or expertise from both parties. A nonprofit cost-sharing agreement helps both parties to pool their resources and reduce their overall costs while achieving their common objectives.

How Does a Nonprofit Cost-Sharing Agreement Work?

A nonprofit cost-sharing agreement outlines the financial and resource contributions of each party towards the common goal of the project. The agreement also specifies the project`s scope and expected outcomes, including timelines and milestones. The cost-sharing agreement will include details such as the percentage of the total costs that each party will fund, how the parties will share resources, and any other relevant details.

Once the parties agree on the cost-sharing agreement`s terms, they sign the document, and funds are transferred according to the agreement. Each party will be responsible for tracking their expenses and ensuring they are contributing their agreed-upon percentage of the total costs.

Benefits of a Nonprofit Cost-Sharing Agreement

Collaborating through a nonprofit cost-sharing agreement has several benefits for nonprofit organizations, including:

1. Reduced Costs: By sharing resources and expenses, both parties can reduce their overall costs, making it easier to accomplish their goals.

2. Enhanced Resources: Nonprofit cost-sharing agreements allow organizations to pool their resources, which can lead to access to more funding and expertise. This allows them to take on projects they may have been unable to handle on their own.

3. Improved Efficiency: By collaborating on a project, organizations can combine their strengths and expertise to increase efficiencies, leading to better results in less time.

4. Increased Impact: Working together, nonprofit organizations can achieve greater results than they would have been able to accomplish individually, leading to increased social impact.


Nonprofit cost-sharing agreements are a great way to achieve common goals while reducing overall expenses. These agreements allow nonprofit organizations to pool their resources and expertise to accomplish shared objectives. By working together, nonprofit organizations can increase efficiency, reduce costs, and achieve greater social impact. With a well-structured cost-sharing agreement, nonprofit organizations can build strong partnerships that benefit all parties involved.