In 1987, SOP No. 87‐2 permitted charities to report a portion of the joint costs associated with combined public education efforts and fund‐raising appeals as program service expenses. Charities used the standard to allocate costs related to direct mailings. A decade later, SOP No. 98‐2 amended SOP No. 87‐2 and provided stricter guidelines with respect to when and how charities can allocate joint costs. This paper examines: (1) whether the adoption of the joint cost standards impacts how charities classify program expenses, and thus, affects the program ratio—a widely used indicator of spending efficiency, and (2) whether the adoption of joint costing standards causes charities to alter fund‐raising strategies. The data indicate a higher program ratio after the adoption of SOP No. 87‐2. Furthermore, the data suggests that after passage of SOP No. 98‐2, a subset of charities alter their fund‐raising strategies and stop allocating joint costs. In addition, charities that continue to allocate joint costs reduce joint cost allocations to programs. Although charities report fewer joint costs under the new regime, program ratios do not decrease under SOP No. 98‐2.