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Building the Knowledge Base of Nonprofit Management:
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Cost
Abstract
This article presents four rules to observe in looking at the costs of social care services: (1) costs should be measured comprehensively; (2) the cost variations that are inevitably revealed in any empirical exercise--variations between clients, facilities, areas of the country-- offer a wealth of information which should be explored and exploited; (3) variations encourage comparisons--this service is cheaper than that one, this group of clients is more costly to accommodate than that group--and only like-with-like comparisons have full validity; and (4) cost information should be integrated with information on client outcomes. Cost analyses will or should never "make decisions," but they can "make decisions better informed." Cost information is an indispensable part of an efficient analysis, and efficiency considerations should inform almost all policy and practice discussions in areas like social work that embody such important social perspectives and that often are so dependent on public subsidies. Consequently, policy or practice changes that ignore costs, or that embody cost information without obeying or recognizing the four basic rules, will usually be of dubious validity, and will sometimes offer advice that is dangerously inaccurate. (This issue of Administration in Social Work contains 11 articles on efficiency and the social services.)
Journal
(1991)
vol15
no1
pages45-63
Categories
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Nonprofit Management
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Financial Planning and Management
