Member Benefits Expense Ratio — get_expenses_membbenefits

Benefits paid to or for members as a share of total expenses.

Formula:

expenses_membbenefits = member_benefits / total_expenses

Definitional Range

Bounded [0, 1]. Near zero for most public benefit charities; potentially high (above 0.50) for mutual benefit organizations.

Benchmarks and rules of thumb

Interpret in the context of the organization's exempt purpose and subsection code.
Non-zero values for 501(c)(3) organizations should be reviewed for compliance with private benefit restrictions.

Calculated For: 990 filers only.

Usage

get_expenses_membbenefits_ratio( df,
  member_benefits           = "F9_09_EXP_BEN_PAID_MEMB_TOT",
  total_expenses            = "F9_09_EXP_TOT_TOT",
  winsorize  = 0.98 ,
  range     = "zo",
  sanitize   = TRUE,
  summarize  = FALSE )

Arguments

df: A data.frame containing the fields required for computing the metric.
member_benefits: Benefits paid to or for members (total).
total_expenses: Total functional expenses.
winsorize: Winsorization proportion between 0 and 1 (default 0.98).
range: Character string specifying the theoretical range of the ratio, used to set winsorization bounds. Default "zo". Options: "np" (negative to positive), "zp" (zero to positive), "zo" (zero to one), "nz" (negative to zero), or a custom "lo;hi" pair (e.g. "0;10").
sanitize: Logical (default TRUE). If TRUE, imputes zero for NA financial fields before computing, respecting form scope.
summarize: Logical (default FALSE). If TRUE, prints summary statistics and density plots for all four output columns.

Value

The original data.frame with four new columns:

expenses_membbenefits (raw ratio)
expenses_membbenefits_w (winsorized)
expenses_membbenefits_z (z-score)
expenses_membbenefits_p (percentile rank, 1-100)

Details

Primary uses and key insights

The member benefits expense ratio measures the share of total functional expenses paid out as direct benefits to members. Primarily relevant for membership associations (unions, trade associations, professional societies) where member benefit payments are a core activity. For most public benefit nonprofits this ratio is near zero.

Formula

Benefits paid to or for members (Part IX line 4, Column A) / total expenses (line 25A). The numerator field is PZ scope, but the denominator (F9_09_EXP_TOT_TOT) is reported only on the full 990, so the ratio is calculated for 990 filers only.

Canonical citations

Frumkin, P. & Keating, E.K. (2001). The price of doing good. Policy and Society, 20(4), 94-112.

Variables used:

F9_09_EXP_BEN_PAID_MEMB_TOT: Benefits paid to members (member_benefits)
F9_09_EXP_TOT_TOT: Total functional expenses (total_expenses)

Examples

library( fiscal )
data( dat10k )
d <- get_expenses_membbenefits_ratio( df = dat10k )
#>    :: Total expenses equal to zero :: 56 case(s) replaced with NaN
head( d[ , c( "expenses_membbenefits", "expenses_membbenefits_w", "expenses_membbenefits_z", "expenses_membbenefits_p" ) ] )
#>   expenses_membbenefits expenses_membbenefits_w expenses_membbenefits_z
#> 1                    NA                      NA                      NA
#> 2                     0                       0               -1.616375
#> 3                    NA                      NA                      NA
#> 4                     0                       0               -1.616375
#> 5                    NA                      NA                      NA
#> 6                     0                       0               -1.616375
#>   expenses_membbenefits_p
#> 1                      NA
#> 2                       1
#> 3                      NA
#> 4                       1
#> 5                      NA
#> 6                       1