Why can’t a management and general/expense ratio and fund-raising/expense ratio be computed?
The management and general/expense ratio and fund-raising/expense ratio cannot be computed because the information required to calculate these ratios is not readily available or consistently defined for all organizations. Let me explain further.
1. Management and General/Expense Ratio: This ratio typically measures the efficiency of an organization's administrative and management functions relative to its total expenses. It quantifies how much of the total expenses are allocated to management and general expenses, such as salaries, office operations, and administrative costs.
To calculate this ratio, you would need the total expenses of the organization and the specific amount allocated to management and general expenses. However, organizations may not explicitly disclose this breakdown in their financial statements or public disclosures. Therefore, without the necessary data, it is not possible to compute this ratio accurately.
2. Fundraising/Expense Ratio: This ratio indicates how effective an organization is at converting fundraising expenses into actual funds raised. It is commonly used to evaluate nonprofits' fundraising efficiency and assess their ability to maximize the impact of their fundraising efforts.
To calculate this ratio, you would need the total expenses related to fundraising activities, such as marketing campaigns, events, or personnel costs, as well as the total funds raised. However, organizations often do not provide detailed information on fundraising expenses in their financial statements. Therefore, without clear and consistent reporting of these expenses, it is challenging to compute this ratio.
In summary, the lack of consistent and readily available data on management and general expenses and fundraising expenses prevents the computation of management and general/expense ratio and fund-raising/expense ratio.