P – Program Expenses: How much does the charity spend on its programs?
Our research shows that most charities spend at least 75% of their expenses on program services–things that directly serve their mission or purpose. In other words, at least 75% of dollars spent by the organization should go directly to fund the services and benefits that the charity provides. A simple math calculation will help you determine the percentage for any charity. From the most recent Form 990, take the amount on line 13: Program Service Expenses and divide that by the Total Expenses listed on line 17. For example, if a charity lists $800,000 on line 13, they spent that dollar amount on programs during that year. Their total expenses, line 17, are listed as $1,000,000. Therefore, $800,000/$1,000,000= 0.800. Multiply this by 100 to get a percentage, or 80%. As a frame of reference, seven out of ten charities on our site spend at least 75% of their expenses on program services. A charity that spends below 75% on programs underperforms most charities we evaluate, so if this is
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- P – Program Expenses: How much does the charity spend on its programs?
