Efficiency Score

The Efficiency Score is NonprofitTruth's proprietary composite metric that rates nonprofits on a scale of 0 to 100 and assigns a letter grade from A (most efficient) to F (least efficient). The score combines four weighted factors drawn from IRS Form 990 data. Program spending ratio (40% weight) measures what percentage of total expenses goes directly to charitable programs — the higher the better. Administrative cost ratio (25% weight) evaluates overhead spending relative to total budget, with lower administrative percentages earning higher scores. Revenue growth (20% weight) tracks year-over-year revenue trends to assess organizational sustainability and momentum. Reserve ratio (15% weight) examines net assets relative to annual expenses to determine whether the organization maintains a prudent financial cushion — organizations with 3 to 18 months of reserves score highest, as too little indicates fragility and too much suggests hoarding. Letter grades map to score ranges: A (80-100), B (65-79), C (50-64), D (35-49), and F (below 35). The Efficiency Score is designed to give donors a quick, data-driven snapshot of organizational health, but it should be considered alongside qualitative factors like mission impact, program outcomes, and organizational context that financial data alone cannot capture. Full methodology details are available on the NonprofitTruth methodology page.