IRS Form 990: A Grant Writer’s Best Friend (Pt. 2)

How to Break Down Your Expenses Without Breaking a Sweat

In our last post, we showed you how your IRS Form 990 is more than just a tax form—it’s a treasure trove of information that can make grant writing faster, easier, and more consistent.

Now we’re diving into one of the most common (and dreaded) questions on grant applications:

 “What percentage of your expenses goes toward programs, administration, and fundraising?”

This question trips up a lot of nonprofit leaders, and we get why. Trying to break down every line of your budget manually? No, thank you.

Here’s the good news: You don’t have to do that. It’s already done.

Your accountant has already categorized your expenses, and your 990 has captured those calculations in one easy-to-find place. In this post, we’ll walk you through exactly where to look, how to calculate the percentages, and why this matters to funders—so you can stop second-guessing and start submitting with confidence.

Let’s take the mystery (and the math anxiety) out of the process. Ready?

Where to Find the Breakdown – Page 11 of Your 990 Form

Let’s cut to the chase. The breakdown of your organization’s expenses—how much goes to programs, administration, and fundraising—is already sitting on Page 11 of your 990 Form. No guesswork, no spreadsheets, and no digging through your general ledger required.

This section is called the Statement of Functional Expenses, and it's a grant writer’s secret weapon.

Here’s what you’ll see when you get there:

• Column A – Total Expenses: This column shows how much your organization spent in total during the reporting year.

• Column B – Program Services: This is the amount spent directly on carrying out your mission—your core programs and services.

• Column C – Management and General: These are your administrative expenses—things like accounting, HR, insurance, and general office operations.

• Column D – Fundraising: This column captures costs related to raising money—event planning, donor communications, fundraising staff, and so on.

As you scroll down the page, each row breaks out individual categories of expenses (think salaries, rent, office supplies) across those columns. And at the very bottom—Line 25—you’ll see the total for each column.

Those totals are the exact numbers you’ll use to calculate the percentages that funders so often ask for.

If you’ve never looked at this page before, it might feel a little overwhelming at first—but trust us, once you see how it’s organized, you’ll wonder why you didn’t use it sooner.

How to Calculate Percentages Like a Pro

Now that you’ve found the numbers on Line 25 of Page 10, it’s time to turn them into the percentages that funders ask for so often. Luckily, you don’t need a finance degree; all you need is a calculator. This is straightforward math, and the formula is the same every time.

Let’s say your totals from Line 25 look like this:

• Total Expenses (Column A): $500,000

• Program Services (Column B): $375,000

• Management & General (Column C): $75,000

• Fundraising (Column D): $50,000

To calculate each percentage, just divide the category amount by the total expenses, then multiply by 100:

• Program % = 375,000 ÷ 500,000 = 0.75 → 75%

• Administrative % = 75,000 ÷ 500,000 = 0.15 → 15%

• Fundraising % = 50,000 ÷ 500,000 = 0.10 → 10%

Sometimes applications ask for the combined overhead or “non-program” costs. Just add Columns C and D, then divide by Column A:

• Admin + Fundraising = (75,000 + 50,000) ÷ 500,000 = 125,000 ÷ 500,000 = 25%

That’s it. That’s all you have to do to find out how much of your percentage was spent on Programs and Services.

Once you’ve done this once or twice, it becomes second nature—and it’s a huge confidence booster when you’re filling out that budget section on a tight deadline.

In the next section, we’ll talk about where these numbers come from, so you understand what they really mean—and how to feel confident standing behind them.

Where These Numbers Come From (And Why They Matter)

Now that you know how to find and calculate your expense percentages, you might be wondering—how did these numbers even get there in the first place?

The totals in Columns B, C, and D come from a process called functional allocation of expenses. It’s the method your accountant uses to determine what portion of each cost supports your programs, administration, or fundraising efforts.

For example, let’s say your nonprofit runs a community center and pays $1,000 in monthly rent. Your accountant doesn’t just toss that number into a general category—they apply a formula. Maybe 70% of the building’s square footage is used for programming, 20% for admin offices, and 10% for fundraising events. That means 70% of that $1,000 goes under Program Services, 20% under Management and General, and 10% under Fundraising.

This process is repeated across the board—for utilities, salaries, office supplies, software subscriptions, and more. A program coordinator’s salary might be allocated entirely to program expenses, while your executive director’s salary might be split 50% program, 30% admin, and 20% fundraising, based on how their time is spent.

It’s all about accurately reflecting the function of each expense. And when done right, it paints a clear picture of how your organization operates—and how well it stewards its resources.

If you haven’t reviewed your functional allocations in a while, now’s a good time to check in with your accountant. Especially if your staffing structure or program delivery has shifted, making sure your allocations are current will ensure your 990 tells the right story.

What Funders Are Really Looking For

When a funder asks, “What percentage of your expenses go toward programs?” what they’re really asking is:

“Can we trust you to put resources where they matter most?”

They’re looking for signs that your organization is mission-driven, financially responsible, and capable of delivering meaningful impact. The good news is, your 990 already helps tell that story—especially when you know how to frame it.

Many funders expect to see a significant portion of expenses dedicated to programs. But here’s the thing: there’s no magic number. Every organization is different, and your expense distribution may shift from year to year depending on growth, investments, or new initiatives.

Maybe your administrative costs went up because you invested in new donor management software. Maybe your fundraising percentage spiked because you hosted your first large-scale gala. These aren’t red flags—they’re signs of organizational development. And when you pair your percentages with context, funders are far more likely to understand and respect your strategy.

So don’t panic if your numbers don’t look “perfect.” Instead, be ready to explain them. Use clear, confident language to show how each investment supports your mission—whether directly through programming or indirectly through stronger systems, outreach, or infrastructure.

📌 Pro Tip: If your admin or fundraising percentages seem high, address it proactively in your grant narrative. A sentence or two of explanation can turn a potential concern into a story of strategic growth.

Eliminating the Mystery & the Math Anxiety

The next time a grant application asks how your expenses break down, you don’t need to panic—just pull out a calculator. Your 990 already has the numbers, neatly organized and ready to support your case. All you need to do is apply a super simple formula to answer your funders’ questions about expense percentages.

Whether your percentages reflect steady operations or strategic investments, your 990 gives you the language and data to tell a clear, compelling financial story.

Instead of feeling uncertain, you can move forward with clarity—showing funders not just what you spend, but how strategically and mission-minded you spend it.

The mystery is gone. The math is manageable. And your next grant proposal? That’s going to shine.