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What is the average administrative cost percentage for charities in the US?
Executive Summary
The available analyses show there is no single, authoritative “average” administrative cost percentage for U.S. charities; instead, common benchmarks and reported ranges cluster between roughly 10–25 percent for administrative (and in many summaries administrative plus fundraising) expenses, with an upper donor-safety guideline often cited at 35 percent. Different reviewers and analysts emphasize different thresholds—some present 15% or lower as “best,” others report typical ranges of 15–25%, and evaluators focused on performance note recommended program-spending minima like 75% program expense benchmarks (which implies 25% or less for overhead) [1] [2] [3].
1. What people claimed and where those claims came from — the landscape of benchmarks
Analysts cited a mix of public-facing charity watchdog guidance and specific organization examples to make claims about administrative costs. The Better Business Bureau’s Wise Giving Alliance is reported as recommending no more than 35% combined for fundraising and administration, while CharityWatch and other commentators consider charities with 75% or higher program spending as highly efficient—implying overhead around 25% or less [1] [2]. Other summaries assert that administrative costs below 15% are “best,” with sector-specific allowances (museums, food banks) sometimes higher or lower respectively [4]. A few pieces give concrete examples of organizations with very low or very high reported admin costs: some charities report single-digit admin percentages, while others in lists of high admin cost charities have rates above 40% [5] [1].
2. Where the “average” claim breaks down — data gaps and inconsistent definitions
The sources repeatedly note that an explicit, reliable national average is not provided in the available material because charities report overhead differently and some under-report necessary support costs. The National Council of Nonprofits discusses how overhead is defined and why comparisons are often misleading; the Council and others caution that reported overhead numbers mix management, general, and fundraising costs and that organizations sometimes understate overhead to appear more efficient [6] [7]. GiveWell’s historical analysis found recommended charities averaged about 11.5% administration in their 2011 review versus 10.8% for non-recommended groups, illustrating how sampling and methodology change the apparent “average” [8]. These methodological differences mean that quoting a single average without context is misleading.
3. Reconciling the ranges — typical patterns analysts point to
Multiple sources converge on a typical practical range: about 15–25% for administrative and fundraising combined is commonly cited as a normal expectation for many nonprofits, with the 35% ceiling used as a donor-protection upper bound by watchdogs. Practical advice pieces and nonprofit guidance materials present 15% as a benchmark for low overhead and 15–25% as a usual operational band, while specialty organizations or ones scaling services may justify higher overhead for capacity-building [3] [4] [2]. Conversely, lists of outliers show some entities with administration above 40%, underscoring that averages conceal significant variation and that context—mission type, scale, startup vs. mature organization—matters.
4. What this means for donors and policy — performance vs. optics
The evidence tilts toward assessing charities by program impact and context rather than raw overhead percentages. Several analyses highlight that increasing reasonable overhead (for staffing, evaluation, fundraising investment) can improve service delivery and program performance, and that excessively low reported overhead can indicate underinvestment in necessary infrastructure [7] [8]. Watchdog thresholds like 35% are practical rules of thumb but can be weaponized as simplistic heuristics; conversely, program-spending targets (e.g., 75%) offer an alternative framing focused on outcomes rather than line-item percentages [1] [3]. Donors therefore should consult multiple metrics—impact measures, audited financials, and explanations of spending—rather than relying solely on a single overhead percentage.
5. Bottom line — a cautious synthesis for practical use
There is no single average administrative percentage that applies universally; available guidance and sampled reports place typical administrative (plus fundraising) ranges at roughly 15–25%, with watchdog ceilings at 35% and some high-performing groups reporting single-digit admin or up to the low twenties depending on mission and scale [3] [2] [1]. Because reporting practices, mission types, and strategic investments vary widely, use overhead ranges as one input among many: check program-impact evidence, recent audited financial statements, and explanations for overhead trends before drawing conclusions.