Programme Expenditure Ratio
Percentage of total organisational expenditure that is spent directly on charitable activities vs. overhead
What is Programme Expenditure Ratio?
Programme expenditure ratio is the percentage of total spending that goes on charitable activity. It shows how much of an organisation's money goes directly on its mission.
Donors and funders often look at it, though a high ratio alone does not prove effectiveness.
How this KPI is measured
- Function
- Operations & Supply Chain
- Sub-function
- Service Delivery
- Industry
- All Industries
- Type
- Lagging
- Impact
- Efficiency
- Unit
- %
- Measurement frequency
- Annual
- Formula
- (Charitable activity expenditure / Total expenditure) × 100
How to calculate it
Divide charitable activity expenditure by total expenditure, and multiply by 100.
For example, if 8,000,000 of 10,000,000 total expenditure was on charitable activity, the ratio is 80%.
Be clear about how costs are allocated between programmes, fundraising and support, and remember that good governance and fundraising also need funding.
Where it is used
Reporting to donors
Show how money is used.
Reviewing allocation
Check balance of spending.
Benchmarking
Compare with similar organisations.
How to improve it
Tips and common mistakes
- A very high ratio can mean underinvestment in essential support.
- Allocation methods vary. Be transparent.
- Combine with outcomes.
More Operations & Supply Chain kpi library
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