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How much can nonprofit spend on administrative costs?

Your Legal Questions Answered

How much can nonprofit spend on administrative costs?

My company assists not-for-profit organizations and I need to track down what legal percentage a not-for-profit can spend on administrative costs.

There is no legal limit on the amount of money a charity or other nonprofit can spend on “administrative costs.” Various arbitrary limitations on percentages for fundraising or administrative costs have been ruled unconstitutional in cases involving charitable solicitation. Some of the nonprofit watchdog groups have recommended guidelines for the amount spent on matters other than program services, but there is no legal limit so far as I am aware. The percentage for “administration” will vary widely depending on the type of organization it is, what it does, and whether it uses large numbers of volunteers or other “inexpensive” means of delivering its direct services. The real question is whether the organization is fulfilling its mission effectively.

Tuesday, August 11, 2009


My question was answered thank-you

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