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Fact check: What is the average administrative cost percentage for charities in the United States in 2023 versus 2024?
Executive Summary
Charity Intelligence’s review is the only analysis provided that gives a specific average administrative cost percentage — 6.7% for 2024 and 7.1% for 2023, implying a modest decline year-over-year [1]. Other materials supplied do not report a U.S. national average for administrative costs in 2023 versus 2024; instead they offer benchmarks and methodological shifts — watchdog guidance that program expenses should be 65–75% of spending, management/general expense ranges of 7–15%, and the removal of administrative ratios from some rating systems starting in 2023 [2] [3]. These points together show there is no single authoritative U.S. average in the provided dataset and that comparisons are constrained by differing definitions, measurement choices, and the limited scope of Charity Intelligence’s figures [1] [4] [2].
1. What claim surfaces when you ask “average administrative costs”?
The clearest claim in the materials is Charity Intelligence’s report indicating an average administrative cost of 7.1% in 2023 falling to 6.7% in 2024 [1]. That is the only direct numeric comparison between those two years in the supplied documents. All other items discuss ratios and expectations rather than national averages: industry guidance recommends that charities spend 65–75% on program services (which implies administrative and fundraising make up the remainder), and separate benchmarks put management and general expenses typically between 7% and 15% depending on sector [2] [5]. Forbes’ coverage of charity evaluation cites efficiency metrics but does not publish a headline national administrative-percentage average for 2023 or 2024 [4].
2. Why those single-number figures deserve scrutiny before being generalized
Charity Intelligence’s 6.7% and 7.1% figures appear precise but are derived from the organization’s own review process and sample; the dataset provided does not include a methodological appendix explaining sample frame, geographic scope, or whether figures represent Canadian or U.S. charities — a critical point because Charity Intelligence is identified as Charity Intelligence Canada in the analysis list [1]. Without methodological detail, the numbers cannot be confidently extrapolated as a U.S. national average. The other materials show major rating organizations have shifted evaluative emphasis — for example, Charity Navigator removed the administrative expense ratio from its rating algorithm in 2023, reflecting changing standards about whether administrative ratios alone are meaningful [3]. That change undermines reliance on a single averaged administrative percentage as a universal quality marker.
3. What the broader evidence and benchmarks in the supplied sources tell us
The supplied sources collectively present a contextual baseline: watchdog groups and nonprofit guidance recommend charities allocate at least 65–75% to program services, with administrative and fundraising together typically expected to be no more than 25–35% of total expenses [2] [3]. Sector-level benchmarks reported in the materials indicate management/general expenses often lie between 7% and 15%, a range that overlaps with Charity Intelligence’s numbers but is clearly framed as a benchmark rather than a national mean [2]. Forbes and other guides emphasize multiple ratios — program expense, fundraising efficiency, and liquidity — noting that singular reliance on administrative percentage is increasingly viewed as incomplete [4] [6].
4. Bottom line: What you can confidently conclude and what remains unknown
From the provided analyses you can confidently state that Charity Intelligence reports a decline from 7.1% in 2023 to 6.7% in 2024 for administrative costs [1], and that major nonprofit guidance and rating organizations have moved away from treating administrative ratios as sole indicators of effectiveness, preferring program-expense thresholds and broader metrics [3]. What remains unknown is whether Charity Intelligence’s figures represent a comprehensive U.S. average, a Canada-specific result, or a limited sample — and no other source in the set supplies a corroborating national average for 2023 versus 2024 [1] [4] [2]. For a rigorous U.S. national comparison, you need transparent methodology and multiple independent datasets; those are not present among the supplied materials.