ACCA Applied Skills · Financial Management · Financial and other objectives in not-for-profit organisations
A charity spent 1,200,000 in the year, of which 180,000 was fundraising and administration costs and the remainder was spent directly on its programmes. Which of the following is the percentage of total spending going directly to programmes?
The correct answer is 85%. Programme spending is 1,200,000 less 180,000 of fundraising and administration, giving 1,020,000, which is 85% of total spending. The 15% figure is the overhead percentage, not the proportion going directly to programmes.
- A85%Correct
- B15%
- C82.4%
- D118%
Explanation
Programme spending = 1,200,000 - 180,000 = 1,020,000. As a proportion of total spending this is 1,020,000 / 1,200,000 = 85%. The 15% distractor is the overhead ratio (180,000/1,200,000), which is the wrong measure.
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