A good measure that can be used to help assess whether a not-for-profit organization is spending too much on overhead, such as general and administrative expenses, is:
A) Percentage of unrestricted net assets to operating expenses.
B) Current ratio.
C) Total revenues divided by total expenses.
D) Percentage of program expenses to total expenses.

Question

Quizplus · Accepted Answer

The percentage of program expenses to total expenses measures how much of an organization's expenses go directly towards its core programs or services, as opposed to overhead or other non-program expenses. A higher percentage of program expenses indicates that the organization is prioritizing its mission and utilizing its resources effectively, while a lower percentage may indicate that too much is being spent on administrative or other non-essential costs. Therefore, this is the best measure to assess whether a not-for-profit organization is spending too much on overhead.

A Good Measure That Can Be Used to Help Assess