The program expense ratio for a not-for-profit organization will improve if the organization shifts costs from fund-raising to program expenses.

Question

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The program expense ratio is calculated as program service expenses divided by total expenses and provides an indication of the extent to which a not-for-profit is dedicating its resources to programs as opposed to administration, fund-raising and membership development. Shifting costs from fund-raising to program expenses will increase/improve the ratio.

The Program Expense Ratio for a Not-For-Profit Organization Will Improve