Tools for nonprofit insight

Essential resources to enhance transparency and understanding within the nonprofit sector.

Transparency in social services

NoProfits.org is dedicated to promoting transparency and accountability in social services, ensuring that resources intended for community assistance reach those in need efficiently and equitably.

We work to connect people with verified service providers while advocating for responsible stewardship of public and private funding in the social services sector.

Resources

Red flags to watch

  • Excessive admin costs

    Compare admin expenses to program spending.

  • Unclear financial reporting

    Look for detailed breakdowns of spending.

  • Related party transactions

    Check for conflicts of interest in Form 990.

  • High executive compensation

    Compare to similar organizations' reporting.

How to research

  • Start with Form 990

    Review Part III for program details.

  • Check multiple years

    Look for patterns and changes over time.

  • Compare organizations

    Use similar-sized nonprofits as benchmarks.

Analyses

Grant-visualization infographic →

Financial metrics for non-profits

Understanding the financial health of a non-profit is crucial. These metrics can be derived from the IRS Form 990.

Key metrics

  • Program Expense Ratio  (Program Service Expenses / Total Expenses) × 100 990 Data: Program Service Expenses (Part IX, line 24, col B), Total Expenses (Part IX, line 25, col A)
  • Administrative Expense Ratio  (Management & General / Total Expenses) × 100 990 Data: Management & General (Part IX, line 24, col A), Total Expenses (Part IX, line 25, col A)
  • Fundraising Efficiency Ratio  (Fundraising Expenses / Contributions) × 100 990 Data: Fundraising Expenses (Part IX, line 24, col D), Contributions (Part VIII, line 1a)
  • Current Ratio  (Current Assets / Current Liabilities) 990 Data: Current Assets (Part X, Lines 1–6 sum), Current Liabilities (Part X, Lines 18–22 sum)
  • Operating Reserve Ratio  (Unrestricted Net Assets / (Total Expenses / 12)) 990 Data: Unrestricted Net Assets (Part X, line 30, col A), Total Expenses (Part IX, line 25, col A)

Analyzing these metrics over time and comparing them to benchmarks provides valuable insights.

Blog

Hey — check out my blog, where I post about science, math, non-profit issues, and other stuff.

Contact

peter@noprofits.org