Programme Expense Ratio
Programme services expense as a percentage of total functional expenses for the period — the share of everything spent that went to delivering the mission. The most widely read nonprofit efficiency measure, and the most widely gamed: it is only as honest as the cost-allocation method behind it. — Finance KPI anchored to FASB ASU 2016-14, Presentation of Financial Statements of Not-for-Profit Entities.
Rogue ID: finance.np_program_expense_ratio
Type: Percentage
Domain: Finance
Definition
Programme services expense as a percentage of total functional expenses for the period — the share of everything spent that went to delivering the mission. The most widely read nonprofit efficiency measure, and the most widely gamed: it is only as honest as the cost-allocation method behind it.
Formula
program_expense_ratio = program_services_expense ÷ total_functional_expenses × 100.Why it matters
It is what funders, rating services and prospective donors look up, so a board should know its own figure before someone else quotes it.
How to interpret
Charity watchdogs generally treat 65–75%+ as unremarkable, but the ratio rewards under-investment in administration and fundraising; read it alongside the allocation method and never as a quality score on its own.
Related KPIs
finance.np_program_services_expensefinance.np_total_functional_expenses
Source
FASB ASU 2016-14, Presentation of Financial Statements of Not-for-Profit Entities · section: ASC 958-720 (functional expense classification) — published 2016-08-01.
Why does this cite FASB ASU 2016-14, Presentation of Financial Statements of Not-for-Profit Entities? Read the ontology methodology for the published vs editorial tier system, attribution rules, and dispute process.
Stage relevance
| Company stage | Priority |
|---|---|
| Pre-Seed | Core |
| Seed | Core |
| Series A | Core |
| Series B | Core |
| Series C+ | Core |
| Public | Core |
Suggested for stages: Pre-Seed, Seed, Series A, Series B, Series C+, Public.
Default owning functions
- Finance
Machine-readable
- This KPI as JSON:
/api/ontology/finance/np_program_expense_ratio.json - All Finance KPIs:
/api/ontology/finance.json - Full catalog:
/api/ontology/index.json
Management & General
Expense of governing and administering the organisation in the period — executive time not attributable to a programme, finance and HR, audit, insurance, board governance and general occupancy. The second FASB functional class. Persistently understating it is the best-known distortion in nonprofit reporting: real organisations need real administration. — Finance KPI anchored to FASB ASU 2016-14, Presentation of Financial Statements of Not-for-Profit Entities.
Programme Service Fees
Earned revenue from delivering the mission — participant fees, sliding-scale tuition, training and contracted services to other organisations. The nonprofit analogue of an operating top line: revenue exchanged for something delivered, rather than contributed. — Finance KPI anchored to FASB ASU 2016-14, Presentation of Financial Statements of Not-for-Profit Entities.