Fundraising Costs and Efficiency
Fundraising costs include everything needed to conduct your fundraiser. Divide the fundraiser’s expenses by revenue to calculate the cost per dollar raised. For example, spend $5,000 in fundraising expenses and raise $15,000. Your cost per dollar raised is $0.33.
Expense Ratios for Nonprofits
What is a good fundraising expense ratio?
The Better Business Bureau recommends less than 35%.
What is a good fundraising efficiency ratio?
Industry standards range from 4.0 or higher. Focus on building a large, regular donor base instead of relying on a few big donors.
Fundraising Strategies
Some nonprofits pay fundraisers commissions. This is legal but often considered unethical as it may undermine donor trust.
What is the 80 20 rule in fundraising?
The nonprofit’s total expenses should not include more than 35 percent for fundraising. Fundraising events may exceed 35 percent yet still bring profits.
Consultant Selection
Consultants should have experience with nonprofits, recommendations, a record of strengthening programs, and long service in the nonprofit sector. They may charge 10 to 50 percent commissions.
Summary of Best Practices
- Aim for a fundraising expense ratio under 15% according to Charity Navigator.
- Keep overhead costs around 35% or below, with the range for most nonprofits being from 10 to 35 percent.
- Have an annual fundraising plan to support community programs.