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Nonprofit Overhead & Program Expense Ratio Calculator

Calculate a nonprofit's program expense ratio, overhead (management and fundraising) ratio and fundraising efficiency from Form 990 style functional expenses and contributions, compare with Charity Navigator and BBB Wise Giving Alliance benchmarks, and see the effect of reallocating shared costs.

Program services expenses

Management & general expenses

Fundraising expenses

Total contributions raised (gifts, grants, events)

Total revenue (all sources)

Unrestricted net assets (operating reserve)

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How it works

Program ratio = program ÷ total expenses; overhead = (management + fundraising) ÷ total; fundraising efficiency = fundraising ÷ contributions; reserve months = unrestricted net assets ÷ (annual expenses ÷ 12)

US nonprofits report expenses on Form 990 in three functional buckets — program services, management and general, and fundraising — and watchdogs turn the split into ratios donors have learned to check: the share going to programs (70% is the informal norm, 65% the BBB floor) and the cost of raising a dollar (35 cents is the BBB ceiling; well-run mature organisations spend 10–20). The ratios are easy to game through cost allocation and punish organisations that invest in systems, evaluation and staff, which is why the major raters now publicly discourage overhead-only judgments and add reserves, governance and results. Still, a board should know its numbers, how they compare with peers, and how a joint-cost allocation or a capital campaign will move them.

Worked example

An organisation spending $1.65M on programs, $210k on management and $140k on fundraising has a program ratio of 82.5% and 17.5% overhead; raising $1.4M in contributions on $140k of fundraising costs 10 cents per dollar (a 10× return). With $2.1M of revenue it ran a $100k surplus, and $500k of reserves covers three months of expenses.

Frequently asked questions

What counts as fundraising expense?

Staff time soliciting gifts, events (net of direct donor benefits), grant writing, donor databases, direct mail and a share of the executive director's time. Program-related communication with a fundraising appeal is a joint cost allocated between the two.

Is a low overhead ratio always good?

No. Ratios under 10% often mean under-paid staff, no evaluation and deferred technology — the "nonprofit starvation cycle". Funders such as MacArthur and Ford now pay 20–30% indirect on grants for that reason.

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Nonprofit metrics use the conventions of the Fundraising Effectiveness Project, Charity Navigator/BBB standards and US federal grant rules (2 CFR 200) in simplified form; benchmark ranges are sector-wide averages. Your auditor, board and funders' definitions govern reported figures.