Frequently Asked Questions topics include:
Which charities are included?
Why do charity EINs matter?
What are charity (NTEE) codes?
Dollar amounts and rounding.
What does “SGO to do” mean?
What do the Money and Ratios “Status” and “Overall” Symbols Mean?
Spending on programs %.
Largest program % of spending.
Highest paid person % of spending.
Highest paid contractor % of spending.
Reserve ratio.
Fundraising efficiency ratio.
Which charities are included? We include U.S.-based organizations that are public charities tax-exempt under IRC Section 501(c)(3) and have filed either a Form 990 or a Form 990-EZ information return with the IRS. Note: we have not included organizations whose latest IRS filings report annual revenues of less than $25,000. See Charities found here.
Why do charity EINs matter? While two charities may have very similar names, no two charities will have the same federal employer identification number (EIN). Because each charity has its own EIN, EINs are a great way to avoid confusion among charities.
What are charity (NTEE) codes? Taken from the classification system (taxonomy) developed by the National Center for Charitable Statistics and the IRS, NTEE codes are used to categorize charities by the work they do. They are a good way to find charities doing similar work. Read our article on using NTEE codes.
Dollar amounts and rounding: We use only whole dollar amount (no cents) in the Charity Data, following the IRS Form 990 approach. That means that we drop amounts under 50 cents and increase amounts from 50 to 99 cents to the next dollar. Note: when entering money, don’t enter dollar signs, commas or decimal points — the database will take care of that formatting.
What does “SGO to do” mean? You may see “SGO to do” on the Money and Ratios tab. It means that, once underlying information has been entered in related fields by a reporter or SGO staff, SGO will calculate and enter the “SGO to do” result. For example, once the “Total functional expenses ” and “Program service expenditures” have been entered on an organization’s Key 990 Data tab, SGO will calculate and enter the “Spending on programs %” for the organization.
What do the Money and Ratios “Status” and “Overall” Symbols Mean? 
The symbols are a graphic way to depict how a charity measures up against five indicators:
- Spending on programs %,
- Highest paid person, percent of spending,
- Highest paid contractor, percent of spending,
- Reserve ratio and
- Fundraising efficiency ratio.
As discussed below in this FAQs page, indicators have “appropriate” (green), “caution” (yellow) and “failed screening” (red) ranges — illustrated by a color bar.
In the Status column, the 
(green circle or “acceptable”), 
(yellow triangle or “caution, discuss and obtain explanation”) and 
(red octagon or “failed screening”) indicate the individual charity’s status under the five indicators. The 
(black square) indicates that more data must be entered to determine the charity’s status.
The Overall column illustrates a combination of the five Status indicators. In the Overall column, there is a single symbol following this logic:
- first, if any of the five Status indicators shows a red hexagon — the overall status is a red hexagon,
- next, if any of the five Status indicators shows a black square — the overall status is a black square,
- then, if all five Status indicators show a green circle — the overall status is a green circle,
- then, if all five Status indicators show a yellow triangle — the overall status is a yellow triangle, and
- then, if the five Status indicators show a combination of yellow triangles and green circles, the overall status is a
(combined green circle and yellow triangle)
The symbols and indicators are screening tools. The symbols depict the results of five indicators for a single recent year of the organization’s operations. A single year does not necessarily represent the longer-term operations and results of an organization — the results for the single year may be unusual, being either more positive or more negative than the organization’s normal operations. Further, an organization showing all green circles is not necessarily an organization whose programs are effective; while an organization showing multiple yellow triangles could well be doing extraordinary work. In donating, go beyond the results of the indicators and get to know more about the organization. Investigate before you donate.
How and why do you calculate the “Spending on programs %”? How – (i) a reporter or SGO staff member enters the amount spent on programs and the total amount spent, based on the organization’s latest 990 or 990-EZ return, then (ii) we divide the amount spent on programs by the total amount spent, and multiply the result by 100. For example:if an organization reports spending $750,000 on programs while spending a total of $1,000,000, dividing $750,000 by $1,000,000 produces the decimal number 0.75, and multiplying that by 100 produces the result of 75%.
Why – we believe the spending on programs percentage is an indicator of the focus and management approach of an organization.
In our view,
- a percentage between 60% and 80% is appropriate (green zone),
- a percentage above 80% or below 60% (but not below 50%) might be reasonable in an organization’s specific circumstances, but should be discussed directly with and satisfactorily explained by the organization’s management before a donation is made (yellow zone), and
- a percentage below 50% (red zone) means the organization failed to meet our screening standard.
Program spending percentages should not be used standing alone. They are part of an overall evaluation of a charity and its performance. A charity spending an apparently suitable percentage on programs, where the programs themselves accomplish little, is by no means an effective charity.
At times we’re asked why a program spending percentage above 80% should be discussed with the organization. If an organization reports spending more than 80% on programs, that means it is spending less than 20% on administration and fundraising. While an organization might be proud of minimizing administrative and fundraising costs, we believe that well-run organizations must spend meaningful resources on administration and fundraising. So, we suggest donors investigate further to make sure that the organization is not (i) having administrative or fundraising costs paid from an outside source, (ii) underspending on important parts of its operations or (iii) mis-categorizing administration or fundraising costs as program costs.
How and why do you calculate the “Largest program % of spending”? How – (i) a reporter or SGO staff member enters the amount spent on the organization’s highest spending program and the total amount spent, based on the organization’s latest 990 or 990-EZ return, then (ii) we divide the amount spent on the highest spending program by the total amount spent, and multiply the result by 100. For example:if an organization reports spending $600,000 on its highest spending program while spending a total of $1,000,000, dividing $600,000 by $1,000,000 produces the decimal number 0.60, and multiplying that by 100 produces the result of 60%.
Why – we believe the largest program percentage of spending is an indicator of the programs and activities being most pursued by the organization, and a way for a potential donor to see whether or not the organization focuses its work on matters that the donor cares about.
How and why do you calculate the “Highest paid person, percent of spending”? How – (i) a reporter or SGO staff member enters the amount of compensation received by the organization’s highest paid person and the total amount spent, based on the organization’s latest 990 or 990-EZ return, then (ii) we divide that amount of compensation by the total amount spent, and multiply the result by 100. For example:if an organization reports paying $150,000 in compensation to its highest paid person while spending a total of $1,000,000, dividing $150,000 by $1,000,000 produces the decimal number 0.15, and multiplying that by 100 produces the result of 15%.
Why – we believe the percentage of spending on the highest paid person can be an indicator of the focus and management approach of the organization.
In our view,
- a percentage of 5% or less is appropriate (green zone), and
- a percentage above 5% might be reasonable in an organization’s specific circumstances, but should be discussed directly with and satisfactorily explained by the organization’s management before a donation is made (yellow zone).
Comment: if an organization reports that it spends nothing on its highest paid person — look further. Who manages the organization? Do they get paid? If so, who pays them? If not, does that mean the organization is totally volunteer-run? If it is totally volunteer-run, investigate its history and plan for continued operations (depending on volunteers may or may not be a viable long-term operations plan).
How and why do you calculate the “Highest paid contractor, percent of spending”? How – (i) a reporter or SGO staff member enters the amount of compensation received by the organization’s highest paid contractor and the total amount spent, based on the organization’s latest 990 or 990-EZ return, then (ii) we divide that amount of compensation by the total amount spent, and multiply the result by 100. For example: if an organization reports paying $150,000 in compensation to its highest paid contractor while spending a total of $1,000,000, dividing $150,000 by $1,000,000 produces the decimal number 0.15, and multiplying that by 100 produces the result of 15%.
Why – we believe the percentage of spending on the highest paid contractor can be an indicator of the focus and management approach of the organization.
In our view,
- a percentage of 5% or less is appropriate (green zone), and
- a percentage above 5% might be reasonable in an organization’s specific circumstances, but should be discussed directly with and satisfactorily explained by the organization’s management before a donation is made (yellow zone).
How and why do you calculate the “reserve ratio”? How – (i) a reporter or SGO staff member enters the amount of assets, liabilities and total amount spent, based on the organization’s latest 990 or 990-EZ return, then (ii) we subtract the liabilities from the assets and divide the result by the total amount spent. For example:if an organization reports $800,000 in assets, $50,000 in liabilities and $300,000 spent, subtracting the $50,000 of liabilities from the $800,000 of assets produces a result of $750,000, and dividing that by $300,000 in spending produces a result of 2.5.
Why – an organization’s reserve ratio is an indicator of whether its financial reserves are smaller than needed, appropriate or greater than needed. An organization with inadequate reserves may be in danger of failing, while an organization with very large reserves may not need your support.
In our view,
- a ratio between 0.5 and 2.0 is appropriate (green zone),
- a ratio below 0.5 or above 2.0 (but not above 5.0) might be reasonable in an organization’s specific circumstances, but should be discussed directly with and satisfactorily explained by the organization’s management before a donation is made (yellow zone), and
- a ratio above 5.0 (red zone) means the organization failed to meet our screening standard.
How and why do you calculate the “fundraising efficiency ratio”? How – (i) a reporter or SGO staff member enters the amount of revenues, total amount spent and amount spent on programs, based on the organization’s latest 990 or 990-EZ return, then (ii) we subtract the amount spent on programs from the total amount spent and divide the result into the revenues amount. For example:if an organization reports $1,000,000 in revenues, $900,000 in spending and $600,000 in spending on programs, subtracting the $600,000 of spending on programs from the $900,000 of spending produces a result of $300,000 (spent on other than programs); dividing the $300,000 into the $1,000,000 of revenues produces a ratio of 3.33.
Why – the amount an organization raises compared to the amount it spends on fundraising and administration can be an indicator of the organization’s efficiency (or inefficiency) in raising funds.
In our view,
- a ratio between 3.0 and and 5.0 is appropriate (green zone),
- a ratio below 3.0 (but not below 2.0) or above 5.0 might be reasonable in an organization’s specific circumstances, but should be discussed directly with and satisfactorily explained by the organization’s management before a donation is made (yellow zone), and
- a ratio below 2.0 (red zone) means the organization failed to meet our screening standard.
Note: If you divide the fundraising efficiency ratio into $1.00, you get the amount the organization spends to raise $1.00 (examples in the following table):
| Fundraising Efficiency Ratio | Amount Spent to Raise $1.00 |
| 10 | $0.10 |
| 8 | $0.125 |
| 6 | $0.167 |
| 5 | $0.20 |
| 4 | $0.25 |
| 3 | $0.333 |
| 2 | $0.50 |
| 1 | $1.00 |
At times we’re asked why a fundraising efficiency ratio above 5.0 should be discussed with the organization. A ratio above 5.0 means that the organization is spending less than 20 cents per dollar raised on administration and fundraising. While an organization might be proud of minimizing administrative and fundraising costs, we believe that well-run organizations must spend meaningful money on administration and fundraising. So, we suggest donors investigate further to make sure that the organization is not (i) having administrative or fundraising costs paid from an outside source, (ii) underspending on important parts of its operations or (iii) mis-categorizing administration or fundraising costs as program costs.
