Program expense ratio: what it tells you and what it doesn't
The program expense ratio is program service expenses divided by total expenses, both from Part IX, line 25 of Form 990. Across the 25,343 charities on this site, the median is 85.9%. Here's how to read it.
What goes in each column
Each expense is assigned to program services (the mission work), management and general (administration, accounting, the board) or fundraising (soliciting gifts and grants). Shared costs such as rent or a chief executive's salary are allocated across the columns by the organization's own method.
Why ratios differ between causes
Medians vary by cause because the work differs:
| Cause | Charities | Median programs | Median fundraising |
|---|---|---|---|
| Health care | 5,634 | 85.6% | 0.0% |
| Education | 5,499 | 84.4% | 0.8% |
| Human services | 3,614 | 87.2% | 0.2% |
| Unclassified | 2,433 | 86.7% | 0.0% |
| Philanthropy, voluntarism & grantmaking | 1,001 | 90.2% | 1.8% |
| Housing & shelter | 933 | 87.5% | 0.0% |
| Arts, culture & humanities | 876 | 78.5% | 6.0% |
| Mental health & crisis intervention | 864 | 85.2% | 0.0% |
| Community improvement & capacity building | 479 | 89.1% | 0.2% |
| International, foreign affairs & national security | 469 | 86.1% | 2.6% |
| Employment | 409 | 88.0% | 0.0% |
| Environment | 371 | 83.6% | 3.3% |
| Food, agriculture & nutrition | 349 | 94.2% | 2.3% |
| Diseases, disorders & medical disciplines | 314 | 86.7% | 0.4% |
| Religion-related | 290 | 86.0% | 1.9% |
| Crime & legal-related | 274 | 86.7% | 0.8% |
| Animal-related | 245 | 82.1% | 6.5% |
| Recreation & sports | 237 | 84.4% | 1.0% |
| Youth development | 212 | 82.4% | 4.5% |
| Science & technology | 192 | 83.2% | 0.0% |
| Public & societal benefit | 185 | 84.9% | 0.0% |
| Medical research | 169 | 83.9% | 0.1% |
| Civil rights, social action & advocacy | 132 | 82.1% | 4.4% |
| Public safety, disaster preparedness & relief | 67 | 89.6% | 0.1% |
| Social science | 54 | 81.3% | 1.3% |
| Mutual & membership benefit | 41 | 95.7% | 0.0% |
A grantmaking organization that mostly passes money to other charities can report very high program shares. A small organization that does direct services, with a fixed cost base, can report a lower one. Hospitals and universities report revenue and costs at a scale where fundraising is a small slice.
What the ratio can't tell you
- Whether programs work. Two charities with identical ratios can have very different results.
- Whether the allocation is comparable. Organizations use different reasonable methods to split shared costs.
- Whether a low ratio is a one-year effect. A capital campaign, a new office, or a big investment in fundraising can lower the ratio for a year or two. That's why every charity page shows several years.
Research on charity overhead (including the open letter "The Overhead Myth" signed by the heads of GuideStar, Charity Navigator and the BBB Wise Giving Alliance in 2013) cautions against judging charities by this ratio alone. We show it because donors ask for it, next to the medians and the filing, and never as a grade.