What it is
Administrative or management-and-general expenses support an organization’s overall operation, such as governance, accounting and general administration, under its reporting rules.
Why it exists
They identify infrastructure needed to operate an organization rather than assigning every cost to a specific program or fundraising activity.
When it may help
It helps a donor understand reported operating capacity and ask how shared responsibilities are managed.
When it may not fit
A low administrative percentage does not prove strong governance, sound controls or effective service delivery.
Tradeoffs and access
Shared staff and facilities require allocations. Underinvestment in accounting or systems can create risks; unusually high costs can also warrant explanation. The numbers need context, not a universal acceptable percentage.
Tax considerations
This accounting category is not a determination of a donor’s tax deduction or the organization’s compliance with every requirement.
Common mistakes
Avoid labeling all administration waste or comparing figures without checking accounting methods, size and program model.
Fictional example
Fictional Lee sees increased administration during a systems transition and asks what changed and whether the cost is ongoing.
Questions to ask
What functions are included? How are shared costs allocated? What oversight exists? Is a major change temporary or structural?
What to record in Planstead
Record dated source figures and follow-up questions in Charity. Do not convert an expense ratio into an unsupported recommendation.
Next step
Read governance and financial explanations alongside expense totals and contact the organization for missing context.
Sources
Primary sources reviewed 2026-09-14. A source describes its own rules; the fictional examples illustrate questions, not a recommendation.