Calculate Fundraising Effectiveness
A common belief is that fundraising is free because donations are given without a cost…if only that were true!
The reality is that nonprofits acquire many fundraising costs within the organization, ranging from building and everyday upkeep expenses to staffing and promotional costs. It can get expensive fast when you look at everything. So how can you measure if your fundraising efforts are effective?
According to BoardSource, there are a couple equations to look at in order to decide efficiency:
Total Fundraising Net = Total Amount Raised – Total Fundraising Expenses
Once you have your Fundraising Net, you can plug it into this equation to learn your Cost of Fundraising:
Total Fundraising Expenses
—————————————– = Cost of Fundraising
Total Fundraising Net
This being said, your number is how much you spend to net $1.00. So if you end up with a cost of .5, you’re spending $0.50 per $1 you earn.
The higher the number is, the less effective your fundraising efforts are. If they are higher than you’d prefer, look into other ways of lowering costs. Is there room for less promotional materials without losing the donations acquired from those very promotions?
If you don’t have room to lose out on promotions, connect with us.
Raising Help works to help nonprofits do more good by supporting marketing efforts via social media, website management, print, digital or video advertising, event management and more.