Standard 9


Spending should be no more than 35% of related contributions on fund raising. Related contributions include donations, legacies, and other gifts received as a result of fund raising efforts.

Please note that standards 8 and 9 have different denominators.

Formula for Standard 9:
Total Fund Raising Expenses   should be no more than 35%

Total Related Contributions

An organization that does not meet Standards 8, 9 and/or 10 may provide evidence to demonstrate that its use of funds is reasonable. The higher fund raising and administrative costs of a newly created organization, donor restrictions on the use of funds, exceptional bequests, a stigma associated with a cause, and environmental or political events beyond an organization's control are among factors which may result in expenditures that are reasonable although they do not meet the financial measures cited in these standards.

Information Needed from Charity to Determine Compliance:

The charity provides the latest financial statements required for its income level, as specified in Standard 11. Depending on the size of the charity's income, this financial statement may be in the form of audited or reviewed financial statements, internally produced financial statements or IRS Form 990.


In calculating this financial ratio, the Alliance will also consider any issues about the accuracy of the charity's financial statements as described in Standard 13.

The Alliance proceeds as follows in determining the fund-raising expense ratio:

Definitions Used for Standard 9

  • Related contributions refers to those types of support generated through fund raising activities. It is not intended to refer only to annual gifts and can include donations, special event income, bequests, fund raising event revenue, federated campaigns, donated goods, donated services, and grants including foundation and government grants, etc. Other types of revenue (for example, membership dues) may be included under certain conditions.

  • As defined in the American Institute of Certified Public Accountants (AICPA) Not-for-Profit Organizations Audit and Accounting Guide, paragraph 5.27, "Some not-for-profit organizations receive dues from their members. These transfers often have elements of both a contribution and an exchange transaction because members receive tangible or intangible benefits from their membership in the organization." As a result, depending on the circumstances, a portion of membership dues (or the total, if there are no membership benefits) may be considered to be a related contribution.

  • Some organizations may receive contributions that donor(s) have provided with the specification that these gifts be transferred to another charity. For example, a donor to a federated campaign specifies that the contribution be given to ABC charity. In such circumstances, the accounting rules require that such donations not be recognized as part of the federated organization's total revenue. For purposes of this standard, however, if fund raising expenses are incurred by the federated organization to generate such gifts, those gifts are considered to be related contributions.

  • Fund raising expenses include invitations to voting membership and appeals to voting members, when a contribution is a principal requirement for membership

  • Fund raising< procurement. grant and above), (see development membership or member donors), previous (soliciting renewal new out (seeking acquisition donor to, limited not is but>
  1. Using the charity's audited or reviewed financial statements

  2. If the charity does not have audited or reviewed financial statements, the Alliance uses the IRS Form 990 to calculate the ratio. Using the IRS Form 990, the Alliance identifies the total related contributions figure, usually by adding the following three applicable line items: line 1d (total contributions) plus line 3 (membership dues) plus line 9c (revenue from special fund raising events). The Alliance then divides line 15 (total fund raising expense) by the total related contributions figure to determine the ratio of fund raising expense to related contributions (See also application of Standard 13).

  3. If the charity does not have an audited or reviewed financial statement, or IRS Form 990, the Alliance uses the latest available unaudited financial statement to calculate the ratio of fund raising expense to related contributions as explained in (a) above.

  4. If the charity does not have audited, reviewed or unaudited financial statements but completes IRS Form 990-EZIRS 990-EZ does not identify the charity's total fund raising expenses.

A charity that does not meet this 35% standard and believes there is an extenuating circumstance should inform the Alliance of its position.

In applying this standard, the Alliance prefers to use the audited financial statements rather than the IRS Form 990 for reasons including the following:

  • In some cases, the audit report combines the finances of the subject charity with the finances of entities closely affiliated with it through financial and governance relationships, as required by generally accepted accounting principles (GAAP). However, the IRS may require these different entities to file separate IRS Form 990s instead of a combined form.

  • The audit report may include the value of donated services and the use of facilities as both a contribution and corresponding expense item, while the IRS Form 990 does not include these amounts.

  • The audit report may include certain note disclosures relevant to the application of this standard that would not appear in the IRS Form 990.