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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 three financial-health indicators, all drawn from fields the IRS Form 990 feed actually reports:

  • Financial Health / Operating Reserves, 40% weight. Net assets divided by monthly operating expenses, with a penalty for persistent deficits. This measures financial resilience — how many months the organization could operate without new revenue. Roughly 3 months to 2 years of reserves is generally considered healthy; far less is fragile, far more can indicate hoarding.
  • Revenue Growth Consistency, 35% weight. Year-over-year revenue trends over the most recent 3-5 years of filings. Steady growth with low volatility indicates sustainable funding rather than dependence on one-off windfalls.
  • Officer Compensation Ratio, 25% weight. Total compensation of current officers, directors, trustees, and key employees (Form 990 Part IX, line 5) as a percentage of total revenue. We weigh this against organization size, since appropriate compensation varies significantly by budget. This is an aggregate figure for all listed officers, not a single executive's salary.

Why no program-spending ratio? Many charity raters lead with the share of expenses that goes to programs. We deliberately do not, because total program service expenses (Form 990 Part IX, line 25, column B) are not carried in the ProPublica Nonprofit Explorer feed we ingest — only program revenue is. Rather than estimate that figure and present it as fact, we exclude it entirely. You can read the program-vs-overhead split directly on each organization’s e-filed Form 990, on Candid (GuideStar), or on Charity Navigator.

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 Efficiency Score measures financial structure, not mission impact. An organization with healthy reserves and steady revenue can still deliver weak outcomes; pair these signals with independent program evaluations.
  • The score does not include a program-vs-overhead ratio, because that figure is not available in our data source (see above). Donors who weight program spending heavily should read the organization’s Form 990 Part IX directly.
  • Officer compensation is an aggregate of all current officers and key employees (Form 990 Part IX, line 5), not a single CEO’s pay. Per-person amounts appear on Schedule J.
  • 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.