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 they are not standalone financial ratios. These ratios are typically used in the context of a nonprofit organization's financial statements, specifically in the Statement of Functional Expenses.

To compute the management and general/expense ratio and fund-raising/expense ratio, you would need information from the nonprofit organization's financial statements. Here's a step-by-step guide on how to calculate these ratios:

1. Obtain the nonprofit organization's financial statements, specifically the Statement of Functional Expenses.
2. Identify the expenses categorized as management and general expenses. These expenses are used to support the overall management and administration of the organization, including activities such as executive leadership, finance, human resources, and governance.
3. Sum the total management and general expenses.
4. Identify the expenses categorized as fund-raising expenses. These expenses include costs incurred to raise funds for the organization, such as marketing, advertising, and events.
5. Sum the total fund-raising expenses.
6. Compute the ratios by dividing the total management and general expenses by the total expenses and the total fund-raising expenses by the total expenses. The ratios are expressed as percentages.

For example, if a nonprofit organization has $100,000 in management and general expenses and $50,000 in fund-raising expenses, and the total expenses are $500,000,

Management and general/expense ratio = ($100,000 / $500,000) * 100 = 20%
Fund-raising/expense ratio = ($50,000 / $500,000) * 100 = 10%

By calculating these ratios, you can assess the proportion of expenses allocated to management and general activities and fund-raising efforts compared to the total expenses of the organization.