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How Much Should It Cost to Fundraise?

January 10, 2019

This simple question has no right or wrong answer but in order to focus more on mission, here are some suggestions from Wealth Engine and Affinity Resources:

Annual Giving
The standard that many folks quote when identifying an appropriate cost per dollar raised for Annual Fundraising is often 20% or 20 cents for every dollar raised. This number has its origins in the book, Fund-Raising: Evaluating and Managing the Fund Development Process (1999), in which James Greenfield observed the following costs associated with different kinds of fundraising:

 

Fundraising Activity/Method                                                           Average Cost to Raise One Dollar

 

Capital Campaign/Major Gifts                                                         $0.05 to $0.10 per dollar raised

Corporations and Foundations (Grant Writing)                             $0.20 per dollar raised

Direct Mail Acquisition                                                                     $1.00 to $1.25 per dollar raised

Direct Mail Renewal                                                                         $0.20 per dollar raised

Planned Giving                                                                                  $0.15 per dollar raised

Benefit/Special Events                                                                     $0.50 of gross proceeds

Grant Writing                                                                                     $.05 per dollar raised

National Average Overall Fundraising                                            $0.20 per dollar raised

 

These are averages and there are many variables involved. Generally speaking the most significant variable is your organization's experience with fundraising. Size matters as well. In larger operations there is also an economy of scale that can be achieved.

 

It is important to bear in mind the words of Mal Warwick who has written extensively on fundraising. "The 'overall fundraising Cost to Raise a Dollar' is a myth. There is NO such standard, and anyone who tells you there is one should survey the real world of fundraising in all its diversity. One organization might be embarrassed to spend more than a dime to raise a dollar, while another might be fortunate to squeak by with 40 or 50 cents on a dollar -- and both might be ethically run, well managed organizations."

 

In every instance these costs should be inclusive of all direct staff support to conduct the activity.

For the tax year 2000 (as reported on 990 tax forms) the median level of funds raised was $5.40 for every $1.00 spent.

 

Online Donations
The cost of processing online donations ranges from 3% to 7.5% of the amount of each gift.

 

 

 

 

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