Which veteran nonprofits have the highest program expense ratios and how are they calculated?

1. What the program expense ratio measures and how it’s calculated

The program expense ratio is calculated by dividing total program service expenses by total expenses; it measures the share of an organization’s spending devoted to mission‑related activities rather than management or fundraising (Program expense / Total expenses) ^{[1] [5]}. Multiple accounting/advisory sources repeat this formula and note that the number appears on IRS Form 990 where nonprofits break out program, management/general, and fundraising costs ^{[1] [2] [5]}.

2. Benchmarks and watchdog standards — why “high” isn’t a single number

Industry guidance and watchdogs offer benchmarks rather than universal rules. Some sector benchmarks cited include 70–85% program percentages by subsector and a common rule of thumb around 65–80% for program spending; Charity Navigator’s recent rating rules generally give full credit to organizations with program expense ratios of about 70% or more ^{[2] [3]}. Analysts caution a very high program ratio can also signal underinvestment in infrastructure, fundraising capacity, or reserves, so donors and grantors often look beyond a single percentage ^[6].

3. Veteran nonprofits: sector‑level findings, not a ranked list

A focused study of veteran‑serving nonprofits from the Center for a New American Security (CNAS) concluded that post‑9/11 veteran organizations generally report higher program‑expense shares than pre‑9/11 counterparts — indicating greater mission spending at the aggregate level — but the report did not publish a contemporary, itemized ranking of individual veteran nonprofits by program expense ratio ^[4]. Available sources do not provide a sortable list of veteran charities ranked by program expense ratio (available sources do not mention an ordered ranking of veteran nonprofits by program expense ratio).

4. Why public rankings can be misleading — methodological caveats

Form 990 classifications, cost‑allocation methods, revenue mix, and organization size materially affect the ratio. Advisors and CPA firms note the ratio is “affected by numerous factors” including whether revenue is earned or donated and how overhead is allocated; watchdogs and analysts therefore interpret the metric alongside reserve ratios, fundraising efficiency, and trend data ^{[6] [1] [5]}. The Urban Institute’s work on efficiency standards argues that single thresholds can be blunt instruments and may encourage gaming of classifications on tax forms ^[7].

5. How donors and grantors use the ratio in practice

Grantmakers and individual donors often use program expense ratio benchmarks to screen organizations, viewing higher program percentages as a signal of efficiency — but most funders also examine sustainability and capacity indicators. PBMares and other advisory firms report that donors expect a high share of dollars to reach mission activities and watchdogs commonly recommend at least 65–75% program spending, though that is guidance rather than an IRS mandate ^{[2] [8]}.

6. If you want to identify specific veteran nonprofits with high program expense ratios

Available sources do not provide a ready, recent ranking of veteran nonprofits by program expense ratio; to assemble one you would need to extract program and total expense lines from each organization’s most recent IRS Form 990 or a data aggregator, then compute Program Expense / Total Expenses and compare across groups (available sources do not mention a precomputed ranked list). Accountants’ guides and nonprofit ratio primers explain the calculation and interpretation you should apply ^{[1] [5] [8]}.

7. Competing perspectives and hidden incentives

Some public guidance frames a higher program ratio as unequivocally good (charity‑rating incentives), while research and accounting advisers warn that strict efficiency benchmarks can incentivize underinvestment in administration, personnel, and fundraising needed for long‑term impact ^{[3] [6] [7]}. CNAS’s sector analysis suggests performance differences across cohorts (post‑9/11 vs. pre‑9/11), which may reflect mission models, funding sources, or growth strategies rather than simple “efficiency” ^[4].

Conclusion: The metric and its math are straightforward — program expenses divided by total expenses — and benchmarks (roughly 65–80% or Charity Navigator’s ~70% threshold) help contextualize whether a nonprofit spends a large share on mission work ^{[1] [2] [3]}. However, the available sources do not supply a ranked list of veteran nonprofits with the highest program expense ratios; producing such a list requires checking recent Form 990 filings or an equivalent dataset and applying the standard Program Expense / Total Expenses calculation (available sources do not mention a prebuilt ranking) ^{[1] [5]}.