Asked by: Suelen Mesner
business and finance non profit organizations

What is program ratio?

Last Updated: 5th March, 2020

The program ratio measures the relationship between program expenses (funds a nonprofit devotes to its direct mission-related work) and the organization's total expenses. Over time, organizations should strive to achieve ever-higher program ratios, devoting as many of their resources to "program activity" as possible.

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Also to know is, what is the program expense ratio?

Program expense ratio The program expense ratio provides information on how much of an organization's expenses are being spent on programs versus supporting services, such as management, general or fundraising expenses.

Secondly, what is a good current ratio for a nonprofit? Current ratio measures the ability to pay off short-term obligations. To calculate the current ratio, divide current assets by current liabilities. It is always good to be in the positive, but a truly good ratio is 2-to-1, which means that you have twice as much in current assets as current obligations (liabilities).

Likewise, what is a good program effectiveness ratio?

Generally, a PRR of three to six months on average is a reasonable number. Of course, the higher the ratio, the better. Organizations with less than three months of reserve must consider focusing on strategies to build the expendable net assets or reduction of expenses for better financial strength.

What is a good percentage for charity?

Charities that are A-rated generally spend at least 75 percent or more on their programs, so more of your money goes to causes you want to support,” says Stephanie Kalivas, analyst at CharityWatch.

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What is a good working capital ratio?

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What is a good cost per dollar raised?

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What percentage of revenue should go toward salaries for nonprofit?

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How much should a nonprofit spend on administration?

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What percentage of nonprofits should be overhead?

The Better Business Bureau's standards, published in 2003 by the BBB Wise Giving Alliance, recommend that at least 65 percent of the nonprofit's total expenses should be for program expenses. The nonprofit's total expenses should not include more than 35 percent for fundraising.

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How much should a nonprofit have in reserves?

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What is program efficiency?

An efficient program is one in which the cost per product or service is low relative to some other program, or relative to an ideal. Measurements of program efficiency relate to the cost in relation to products or services NOT to benefits or outcomes. Outputs are the products and services provided by the program.

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How is program efficiency calculated?

Program Efficiency Ratio: By definition, the ratio is calculated by dividing an organization's program service expenses, which is money spent directly to further the NPO's mission, by its total expenses. It measures how much an organization is spending on its primary mission rather than administrative costs.

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What charities have the highest administrative costs?

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How do you assess non profit financial performance?

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