Assess your organization's financial health and mission focus by analyzing how resources are allocated across key expense categories.
Total Expenses = Program Expenses + Administrative Expenses + Fundraising Expenses
Program Expense Ratio (PER) = (Total Program Expenses / Total Expenses) * 100%
Administrative Expense Ratio (AER) = (Total Administrative Expenses / Total Expenses) * 100%
Fundraising Expense Ratio (FER) = (Total Fundraising Expenses / Total Expenses) * 100%
If an organization has Program Expenses of $800,000, Administrative Expenses of $120,000, and Fundraising Expenses of $80,000:
For non-profit organizations, productivity isn't measured in profits, but in mission impact and financial stewardship. Donors, grantmakers, and boards of directors increasingly rely on financial metrics to assess an organization's health and effectiveness. The most common and powerful of these metrics are the expense ratios derived from the IRS Form 990. Our free Non-Profit Productivity Calculator is a crucial tool designed for non-profit leaders, staff, and stakeholders to quickly analyze resource allocation and benchmark performance against established standards of efficiency.
This calculator breaks down total expenditures into the three core functional areas: program, administrative, and fundraising. The resulting ratios provide a clear snapshot of an organization's priorities. The Program Expense Ratio, the primary output of the Non-Profit Productivity Calculator, reveals what percentage of every dollar is spent directly on mission-related activities. A high ratio is often seen as a hallmark of strong stewardship. However, a holistic view is critical. While it's tempting to minimize overhead, the Administrative Expense Ratio tells an important story about an organization's investment in its own infrastructure, staff, and long-term sustainability. Starving this area can be detrimental to long-term productivity.
Understanding these financial dynamics is key to building trust and ensuring sustainability. Watchdog groups like Charity Navigator use these ratios as a key component of their rating system, making them highly visible to the public. The Non-Profit Productivity Calculator allows you to calculate these figures instantly, providing an "Efficiency Grade" based on common sector benchmarks. This helps you proactively manage your financial narrative. The data required for this calculator is readily available on an organization's public IRS Form 990, making this tool useful for internal analysis or for evaluating other non-profits. By regularly using the Non-Profit Productivity Calculator, you can make data-informed decisions about budgeting, strategic planning, and resource allocation to maximize your impact. The Non-Profit Productivity Calculator is an essential resource for any stakeholder committed to non-profit excellence.
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The Program Expense Ratio (PER) is a key metric of non-profit efficiency. It measures the percentage of an organization's total expenses that are spent directly on its mission-related programs and services, as opposed to administrative overhead or fundraising costs.
While it varies by sector, a general benchmark is that a Program Expense Ratio of 65% or higher is considered good, and 85% or higher is excellent. However, it's important to consider an organization's size, age, and mission, as these factors can influence what constitutes a healthy ratio.
Yes. While a low administrative ratio (e.g., under 10%) might seem efficient, it can be a red flag. This may indicate that a non-profit is under-investing in essential infrastructure, technology, and staff development, which can hinder its long-term effectiveness, sustainability, and ability to scale its impact.
These figures are publicly reported by most non-profit organizations in the United States on their annual IRS Form 990. You can typically find this form on the organization's website or through public databases like GuideStar and ProPublica's Nonprofit Explorer.