The program expense ratio for a not-for-profit organization will improve if the organization shifts costs from fund-raising to administrative expenses.

Question

Quizplus · Accepted Answer

The program expense ratio is calculated as program service expenses divided by total expenses and provides an indication of the extent to which a not-for-profit is dedicating its resources to programs as opposed to administration, fund-raising and membership development. Shifting costs from fund-raising to administrative expenses will not change the ratio.

The Program Expense Ratio for a Not-For-Profit Organization Will Improve