Q: What Is the 33% Rule for Nonprofits?

A: The 33% rule is a simple way to measure how effectively a nonprofit manages its finances. It suggests that a nonprofit should spend no more than one-third (33%) of its total budget on administrative and fundraising costs—leaving at least two-thirds (67%) for direct programs and impact.

Where the 33% Rule Comes From

The rule isn’t a law, but a guideline popularized by charity rating organizations like Charity Navigator and the Better Business Bureau’s Wise Giving Alliance. It’s designed to give donors confidence that the majority of their contribution goes directly to programs rather than overhead.

How the 33% Rule Helps Donors

Donors often worry about where their money goes. The 33% rule helps set expectations for healthy financial balance—showing that a nonprofit is investing enough in operations to stay sustainable, but not so much that it neglects its mission.

A charity spending far more than 33% on overhead might need to review its efficiency. On the other hand, one spending too little may be underinvesting in growth, innovation, or staff—things necessary for long-term success. The goal is balance, not austerity.

RippleDeeds’ Approach to Transparency

At RippleDeeds, we go beyond percentages—we make every donation’s impact visible. Instead of simply publishing ratios, we require communities to post impact stories every two weeks, complete with photos, videos, and updates on how funds are being used. Donors don’t just trust the math—they can see the results.

Each community also receives a public Impact Rating (a score out of 10) that reflects transparency, engagement, and consistency. It’s a more holistic way to measure accountability—because generosity shouldn’t have to rely on spreadsheets alone.

Should Donors Only Support Charities Under the 33% Rule?

Not necessarily. While the rule is a helpful benchmark, many impactful organizations exceed it for valid reasons—such as investing in technology, training, or advocacy that leads to larger change. What matters most is transparency about where funds go and how they create measurable outcomes.

On RippleDeeds, donors don’t have to guess. They can visit each community page to see recent activity, verified impact media, and real-time engagement from supporters. Every dollar has a story, and every story is visible.

The Future of Transparency in Nonprofits

The 33% rule was created to protect donor confidence. RippleDeeds builds on that idea by turning confidence into certainty. Instead of a static percentage, we provide live evidence of impact—stories that prove generosity is working.

Philanthropy doesn’t need to hide behind ratios. It needs to shine through visibility—and that’s what RippleDeeds is here to do.