Nonprofit Operating Margin Ratio

Does your Board prefer your nonprofit operate at a surplus each year (money left over to allocate to reserves or other initiatives) or are they #teambalancedbudget where the goal is zero dollars?

No dollars or some dollars can both work based on total initiatives and long term planning, but operating at a deficit (negative) likely shows a need for making adjustments in spending and/or money coming in.

Calculate this ratio for your nonprofit to see where you stand as you near the end of the last Quarter of your accounting period (calendar fiscal year Jan - Dec or fiscal year July - Jun).

(If you're a client reading this, you likely get this info already, but if you can't remember, check w/ your accounting manager and they'll be glad to calculate it for you and share some tips and ideas based on what the number is.)