Which of the following would not be classified as a support expense by the not-for-profit organization Save Our Lakes?

• A. The cost of fundraising events.
• B. The cost of the annual lakeshore cleanup activities.
• C. Salaries for program staff.
• D. Equipment purchases for program activities.

Answer: (B)

The main concept being tested is how not-for-profit organizations separate expenses into program expenses versus support expenses. Program expenses are the costs directly tied to delivering the organization’s mission and services, while support expenses help the organization operate but are not tied to delivering programs (such as fundraising and general management).

The annual lakeshore cleanup is a direct activity that fulfills Save Our Lakes’ mission, so its costs are tied to delivering a program. That makes it a program expense, not a support expense. Fundraising events exist to raise funds and are categorized as support expenses. Salaries for program staff are incurred to run the programs themselves, so they’re program expenses. Equipment purchases for program activities enable those programs and are also program expenses. Therefore, the lakeshore cleanup cost stands out as not being a support expense.