What is the difference between a program expense and an operational expense?
We define a program expense in two ways:
1) The direct cost associated with each program
2) The support cost associated with each program
For instance, when we give an Educational Grant via our Empowerment Programs, the actual scholarship would be considered a direct cost. However, in order to determine whether or not a resettled North Korean is eligible or will receive a scholarship, they must go through a “due diligence” process with a LiNK staff member who will review their budget and financial situation, conduct an interview, and follow-up accordingly. The time (% of employee's salary) and resources (% of office usage, etc) spent on that process would be considered as a program support cost.
We define an operational expense as the cost required to keep the organization running each day. These costs include items such as operational salaries, fundraising expenses, telecommunication and software services, and other expenses associated with building and maintaining our infrastructure.