Want to calculate a charity’s program spending percentage?
You can do it in three steps:
- Find the charity’s latest Form 990 or Form 990-EZ return.
- Find the amounts of program service expenditures and the amount of total functional expenditures shown in the return*.
- Divide the program service expenditures by the total functional expenditures, and multiply by 100. You now have the program spending percentage for that year.
Warning: Program spending percentages should not be used standing alone. They are just a part of an overall evaluation of a charity and its performance. A charity spending a high percentage on programs, where the programs themselves accomplish little, is by no means an effective charity.
* For a 2009 or 2008 Form 990, see page 10, line 25, columns (b) and (a). For a 2009 or 2008 Form 990-EZ, see page 2, line 32 and page 1, line 17.