Philosophy: A nonprofit should strive to efficiently and effectively use funds to achieve its mission, balancing the need to expend the majority of its funds on current programs with the need to invest in the infrastructure and administrative capacity necessary to carry out its mission over the long-term.

The Council recognizes that there is no optimal balance point between program, administrative and fundraising expenses for all nonprofit organizations.

Standard: At least 65% of the nonprofit’s three-year average annual expenses are used to directly support programming (ideal range is 70% to 90%). On an annual basis the board monitors this ratio and, if necessary, develops a plan to address any shortage of investment in programs, infrastructure or administrative capacity.

Range:

• 65-70% - Meets standard, provides explanation
• 70-90% - Meets standard, no explanation needed
• 90-100% - Meets standard, provides explanation