Recently FYA put together a Statement of Functional Expenses (SFE) for 2016 at the request of our CPA, Brad Johnston.  The SFE measures a non profit’s efficiency and is part of the IRS Form 990 annual tax return for non profits.  It is also common for donors and grantors to study the SFE of non profits before making financial contributions to determine how efficiently they operate.

This statement divides FYA’s  expenses into three main categories:

The underlying idea of the SFE is that an efficient non profit is one that minimizes its cost of fund raising and administration.

So how did FYA measure up for 2016?

1.   Program expense percentage.  How much do we spend on the programs and services we exist to provide?  FYA had 84% which is considered stellar.  This means that 84% of money that FYA spent was directly spent on operating The Door.

2.  Administrative expense percentage.  FYA had 11%.  Less than 15% is stellar, so we are doing great on this metric.

3.  Fundraising expense ratio.  Less than 10% is stellar, so we are doing great at 5%.

PS   You might want to consider publishing these metrics in the newsletter.  Your donors will be glad to see how efficient FYA is.  These metrics are worthy of bragging.