Our Formula & Methodology
Earned Operating Revenue Index:
Total Earned Operating Revenue/Total Expenses (less depreciation)
Total Earned Operating Revenue
Following Nonprofit Finance Fund’s encouragement to examine performance on a strictly operating basis, we exclude realized and unrealized capital gains and losses from total unrestricted earned revenue.
Total Expenses
Following Nonprofit Finance Fund’s encouragement to examine performance on a strictly operating basis, we look at expenses before depreciation since depreciation is a non-cash expense that accounts for the reduced value of assets due to their use over the year.