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NonprofitTruth

Our Methodology

NonprofitTruth helps donors make informed giving decisions by analyzing nonprofit financial data from IRS 990 filings. We present the numbers clearly and let donors decide what matters most to them — we are data-first, not judgmental.

Data Sources

Our primary data source is the ProPublica Nonprofit Explorer API (projects.propublica.org/nonprofits/api/v2/), which provides structured access to IRS Form 990 data for tax-exempt organizations. IRS Form 990 is the annual information return that most tax-exempt organizations must file, disclosing revenue, expenses, assets, executive compensation, and program accomplishments.

The ProPublica API provides machine-readable access to the data from millions of 990 filings, including the 990, 990-EZ, and 990-PF forms.

How We Calculate the Efficiency Score

Every nonprofit receives an Efficiency Score on a 0-100 scale (A-F) based on four financial health indicators:

  • Program Spending Ratio — 50% weight. The percentage of total expenses spent on programs (as opposed to administration and fundraising). This is the most commonly cited efficiency metric. Organizations spending 75%+ on programs score highest. However, we acknowledge this metric has limitations — some overhead spending is essential for organizational effectiveness.
  • Revenue Growth Consistency — 20% weight. Year-over-year revenue trends over the most recent 3-5 years of filings. Consistent growth indicates sustainable fundraising and community support.
  • Reserve Months — 20% weight. Net assets divided by monthly operating expenses. This measures financial resilience — how many months the organization could operate without new revenue. 3-6 months of reserves is generally considered healthy.
  • CEO Compensation Ratio — 10% weight. CEO/Executive Director total compensation as a percentage of total expenses. We compare against organizations of similar size and mission area, since appropriate compensation varies significantly by organizational budget.

Data Collection Process

We query the ProPublica Nonprofit Explorer API for the most recent 990 filings, extract financial data from each return, and calculate our composite score. We cover organizations filing Form 990 (generally those with gross receipts over $200,000 and total assets over $500,000) and Form 990-EZ (smaller organizations).

Update Frequency

IRS 990 data has a significant lag — organizations file 990s months after their fiscal year ends, and the IRS processes them over additional months. ProPublica typically makes data available within weeks of IRS processing. We refresh our database monthly to capture newly available filings.

Known Limitations

  • The program spending ratio is an imperfect measure of effectiveness. An organization that spends 95% on programs but achieves no impact scores higher than one spending 70% on programs with transformative results. We measure financial efficiency, not mission impact.
  • IRS 990 data is self-reported by the organization. While subject to audit, the data reflects the organization's own accounting and categorization.
  • Small nonprofits filing Form 990-N (e-Postcard) provide minimal financial data and are not scored.
  • Religious organizations, which are generally exempt from filing Form 990, are not included.
  • The Efficiency Score is our own composite metric, not an IRS, BBB Wise Giving Alliance, or Charity Navigator designation.

How to Cite This Data

If you use data from NonprofitTruth, please cite:

NonprofitTruth. "[Organization Name] Financial Efficiency Data." nonprofittruth.com, 2026. Accessed [date].

Underlying data is sourced from IRS Form 990 filings via ProPublica Nonprofit Explorer. 990 data is in the public domain.