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  What is the average cost per dollar raised? Frequently Asked Questions

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Average Cost Per Dollar RaisedA difficult question, and often calculated in a variety of ways.

Benchmarking between organizations is not standard so costs per dollar raised can vary widely depending on interpretation and exclusion/inclusion of such things as facilities costs, the percentage of the CEO's salary that would be related to fundraising and many other items.

Benchmarking is often done against national organizations such as the United Way and their average cost is compared to the institution. However, these costs may also vary according to the type of organization, types of campaigns they run, the stage of the campaign they're in, and how many services are provided by the organization centrally.

For example, if you're raising a much larger percentage of major gifts, then your average $ cost per dollar raised may be lower than an organization more dependent on raising money through annual fund.

Cost per dollar raised may also be greater at the beginning of a campaign since there are always additional startup costs such as a gala, ramped up prospect research, system acquisitions and other investments.

It's also important to monitor the trends in cost per dollar raised. For example, based on your own organization's calculation of costs, how are you tracking over the last 5 years. Are you more or less efficient?

James Greenfield provided the following answer in his book, Fund-Raising: Evaluating and Managing the Fund Development Process (1999). The overall national average cost to raise a dollar (CTRD) is 20 cents (or 80 cents of every dollar raised goes to the charitable purpose/programs):

# Fundraising Activity/Method National Cost to Raise a Dollar

1. Capital Campaign/Major Gifts $ .05 to $ .10 per dollar raised.
2. Corporations and Foundations (Grant Writing) $ .20 per dollar raised.
3. Direct Mail Renewal $ .20 per dollar raised.
4. Planned Giving $ .25 per dollar raise¾and a lot of patience!
5. Benefit/Special Events $ .50 of gross proceeds.
6. Direct Mail Acquisition $ 1.00 to $ 1.25 per dollar raised.
7. National Average $ .20

Annual fund direct mail and telefund costs also typically fall within these ranges, but again will vary depending on the prospect pools you are contacting.

In practice many people associated with a not-for-profit may be engaged in fundraising and may undertake tasks that have a significant fundraising content. If you have a larger ratios of volunteers, it will lower your average cost.

The recent trend in political fundraising on the Internet will also lower your average cost since the acquisition, transaction and retention related costs are often lower than traditional ways of doing this.

The average cost question is asked a lot, but the answer may actually not be that meaningful unless compared to very similar organizations recording everything in exactly the same way.

You should always try to be more efficient, but it may be impossible to achieve the same average cost as some of the organizations you are comparing.

More Information on SupportingAdvancement.Com

Supportingadvancement.com Common Sources of Funding. It is fiscally prudent for organizations to have diverse sources of revenue.

Other Thoughts

The following are from postings on various listservs.

Always an active topic whenever the question comes up, with many ideas, discussions and various sources of information.

Alan Hejnal on Advance-L (In response to the salary aspects of the question.)

We've been doing this for a number of years at Gettysburg, and generally try to follow the methodology of the 1991 CASE/NACUBO study. We are able to include salary costs, and we use the institution's calculation of attributed benefit costs (which is 35% of salary).

We don't include any portion of the president's salary. We do pro-rate the vp's salary and expenses according to a figure arrived at a number of years ago for the percentage of the vp's time spent fund raising, but we don't adjust it from year to year, and, in fact, haven't adjusted it for quite a while!

The main glaring omission in our data is direct and indirect IT costs to support Development. That's budgeted under IT, and the institution doesn't currently have any mechanism to allocate costs to our departments.

Our Finance office does some cost of fund-raising analysis for their own year-end audit-related reporting. We leaned on their data collection for years, until they (unbeknownst to us) changed their reporting to work at a much higher summary level, rather than breaking down the costs into the detail necessary to report in the categories of the 1991 CASE/NACUBO study. When that happened, we worked with them to get a report specifically for our use, which gathers the expense data (to the extent that it's available, of course!).

Hugh Mallon on Advance-L

Historically, there was little attempt to develop true cost-accounting approaches within the nonprofit industry. However, this may be changing with the events of the Senate Finance Committee and the IRS over the past six months.

The answer to transparency lies in the school's desire (emphasis added) to implement an rather old technique known as activity-based accounting standards (“ABAS” – also, known as a mission based or cost accounting reporting) within the school/university/college. Most schools do not necessarily utilize cost accounting methods but only estimates in functional expense reporting.

Utilizing an ABAS approach would allow the school’s internal management internal community (board and senior staff) and external community (general public) to better understand the interaction of the financial components of the operating budget (Sources and Uses of Revenue). Under ABAS, all functional expenses are apportioned to the appropriate source of revenue based upon activity based approach. For example, if the president of a college/university/school spends 75% of his time in fund-raising - 75% of his direct and indirect costs would be allocated to the function expense category of fund-raising. This though does not very often occur.

ABAS's does not change the flow of revenue but re-apportions functional expenses more appropriately to the revenue source to better reflect to true costs associated with acquiring and managing such revenue. Initially, the process is somewhat time consuming to develop and implement. This has been the major reason why so many nonprofits have not applied such a technique - the Olde cost-benefit analysis dictates that the organization should use estimates. As a result, the lack of reasonable allocation of functional expenses makes it very difficult, even for the trained professionals, to measure the respective activities contributions to the long-term financial health of the organization. However, if the organization is willing to make the effort and investment, ABAS will produce more objective, reliable and relevant picture of the financial health and well-being of the organization and is a catalyst to improving the stewardship roles of the board and senior management.

This failure to accurate reflect the functional expenses understates the true costs of the acquisition and management of revenue. For example - an apportionment of the salaries for President and other personnel who may participate in the fund-raising process are often not included in fund-raising costs. Even if a prorates shares of the salaries were included, the organization fails to included direct and indirect overhead {benefits, physical plant, IT, etc) that supports such activities.

The use of estimates evolved from the ting the accounting industry who recommended the use cost estimates. A very typical approach used is: 80% - Program, 15% to 18% - General and Administration, 2% to 5% - Fund-raising) This is done rather than attempting to really quantify the costs. Most of the functional expenses of fund-raising have generally been buried in Program, Management and General Administrative costs. This approach understates the true cost of fund-raising.

This may change though in the near future as the Senator Grassley and his cohorts are positioning the Senate, Congress and the IRS to provide increased transparency of nonprofits especially in the area of governance and financial reporting (accurate reflection of sources and uses of revenue). It is anticipated that Grassley will come out with his own version of Sarbanes-Oxley in the three quarter of 2005.

Bryan Maloney on Advance-L and Response from John Taylor

A simple standard can be mythical and that in the real world there are many variables affecting any calculation of the cost of raising a dollar. However, is there an accepted standard for which cost items should be included in this calculation? For example, some cost calculations might include personnel costs, like salaries and benefits, which sometimes need to be prorated for the percentage of time spent by a staff member on fundraising, while others include only operating budget numbers.

Any thoughts on this? Many thanks!

This is problem, Bryan. There isn't a ton of agreement. The CASE Management & Reporting Standards (3rd edition) includes the definitions and categories originally outlined in the 1991 CASE/NACUBO cost of fund raising study. But it says not to include a portion of your CEO's salary even if they are involved in fundraising. Back then that might have been rare. Today fundraising is typically in the campus CEO's job description!

But the IRS has their own idea if you read the data entry requirements for completion of the 990 form (which is partly what the Center on Philanthropy used for their recent fundraising cost study found at http://nccsdataweb.urban.org/FAQ/index.php?category=40 ).

So more food for though - but no real solid answer . . .

Don Ray on Advance-L

According to the Association of Fundraising Professionals (AFP), here are some reasonable cost per dollar raised guidelines. AFP, in my book, is perhaps the most authoritative source of information on this topic.

1) Direct Mail Acquisition (acquiring new donors through direct mail): $1.25 to $1.50 per dollar raised, with 1% rate of return or better
2) Direct Mail Renewal (getting repeat donors via direct mail): $.25 per dollar raised with 50% rate of return or better
3) Special Events: Net return of $.50 per dollar raised
4) Corporations and Foundations (grants received and sponsorships): $.20 per dollar raised
5) Planned Giving: $.25 per dollar raised
6) Capital Campaigns: $.05 to $.10 per dollar raised

As you well know, to calculate the cost to raise money, the formula is "FC=E/GR" (which is "Fundraising Cost equals expenses divided by gross revenue"). For example, if you spent $2500 and generated gross revenues of $10,000, your Fundraising Cost would be $.25 for every dollar raised.

Lori A. Redfearn on Alumni-L

The California State University collected data on our cost to raise a dollar for three years from 2001-2003. Both the mean and the median of our 23 university system was 16 cents. The interquartile range was 9 - 21 cents. This figure compares fundraising costs to amount raised. We use a slightly modified version of the methodology from the CASE/NACUBO study "Expenditures in Fund Raising, Alumni Relations, and other Constituent (Public) Relations" which was published in 1990. That study, which is based on national data over 20 years old, reported a three year average: mean of 16 cents and median of 11 cents with an interquartile range of 8 to 16 cents.

The CSU among others is encouraging CASE to refresh the national study and the Philanthropy Commission is exploring the options.


Robert Weiner on Fundlist

Quoting Mal Warwick.


"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.

This myth has been propagated by the self-appointed charitable "watchdogs," who long for simple-minded rules and guidelines, and by some major-gift fundraisers who know that raising money in large chunks is always cheaper than raising it in small ones.

The reality does not live up to this simplistic approach. The cost of fundraising varies from one nonprofit organization to another based on a host of variables: the age of the organization, the size of the budget, the popularity of the cause, the fundraising methods used, the skills of the development staff, the strength of the organization's leadership -- and many more.

I've written extensively about this subject (and I'll probably be forced to continue doing so, since this myth is so persistent). You can read what I've written -- including information about the relative cost of various fundraising methods -- in my most recent book, The Five Strategies for Fundraising Success (Jossey-Bass, 2000), as well as in some of my earlier books. You can also learn a lot about how to evaluate your fundraising program from Jim Greenfield's books on how to assess a development program."

More Information @

Supportingadvancement.com Fundraising Costs. Fundraising and administrative costs. Benchmarking and best practices.
  The Center on Philanthropy at Indiana University.

Supportingadvancement.com Article in the University of Alberta's Advancement Services newsletter on fundraising costs.

Supportingadvancement.com Impromptu Survey done on Fundraising Fees and Endowment Costs.
Integrating Costs Per $ Raised Into Your Standard Reporting

We get asked the same questions on a repeated basis and cost per $ raised is just one of them. How about looking at how your fundraising correlates with the stock market, real estate prices, inflation or any other economic indicators over a period of time?

We typically respond to these by doing some research and then quickly putting together a spreadsheet.

A simple way to integrate this into your reporting is to create a table in your data warehouse that contains some of these economic indicators. It can then be indexed by year, fiscal year or any other date ranges that you report on. By joining this economic indicators table to other reports, you can include these indicators and correlations directly in your reporting. The indicators table only needs to be updated once every period that you want to publish the information for.

Other References

Billitteri, Thomas J. and Debra K. Blum. "Unsettled Accounts: New Bookkeeping Standards Intended to Stop Charities From Understating Fund-Raising Expenses Are Drawing Sharp Criticisms," Chronicle of Philanthropy 10, no. 11 (March 26, 1998):  41-46, 51.

Bradley, Bill; Jansen, Paul and Silverman, Les. "The Nonprofit Sector's $100 billion Opportunity," Harvard Business Review (May 2003): 3-11.

"Calculating the Cost of Fundraising: AFP Members Debate the Issue," AFP Newsroom (June 27, 2003):  Alexandria, VA: Association of Fundraising Professionals, Clolery, Paul. "Salary vs. Commissions: New Study Examines Fundraising Costs, "Nonprofit Times 12, no. 4 (March 1998): 38.

A study of fund raising in Pennsylvania found that while salaried fund raising solicitors cost more, they generate far more for nonprofits than those solicitors paid only on commission, or on a cost-plus basis.  Results are based on reports filed with the Pennsylvania Bureau of Charitable Organizations between 1991 and 1996.  The study was conducted by Janet Greenlee of Pennsylvania State University and Teresa Gordon of the University of Idaho. The study, "The Impact of Professional     Solicitors on Fundraising in Charitable Organizations," was presented at the annual meeting of the Association for Research on Nonprofit Organizations and Voluntary Action.

Costa, Nick G. Measuring Progress and Success in Fund Raising. Falls Church, VA: Association for Healthcare Philanthropy, 1991. This professional paper describes reports and formulas to use in measuring the effectiveness and productivity of healthcare fund-raising programs.

Council for Advancement and Support of Education and the National Association of College and University Business Officers. Expenditures in Fund Raising, Alumni Relations, and Other Constituent (Public) Relations. Washington, DC: Council for Advancement and Support of Education, 1990. 48 pages.

Information from 51 American colleges and universities provides answers to the question; How much does it cost to raise a dollar?  The data quantify the relationships among gift income, advancement program expenses, and selected institutional characteristics.  Includes a standard set of guidelines and definitions enabling institutions to document and compare their advancement costs from year to year and within and among comparable institutions. Prepared by CASE and NACUBO with funding from the Lilly Endowment, Inc.

Coviello, Sarah C., Denise Nitterhouse, and Florence C. Sharp. "Accounting for Joint Costs: Donors and Regulators Are Focusing More Attention on Fund-Raising Percentages and Cost Allocations.  Fund Raisers Need to Know the Impact on Financial Statements," Fund Raising Management 20, no. 8 (October 1989): 62, 64-66, 68.

Draper, Lee. "100% Goes to Charity?  A Practical and Philosophical Look at What it Takes for a Nonprofit to Deliver Services," Foundation News and Commentary 44, no. 1 (January/February 2003): 33-37.

Duronio, Margaret A., Bruce Loessin, and Roy J. Nirschel Jr. "The Price of Participation: What You Spend to Get More Donors--It Might Not Need to Be Much--Depends Only on You," Currents 15, no. 4 (April 1989): 39-42, 44.

Raising alumni participation rates makes long-term sense, but there is no clear way to compare your fund-raising costs against another institution's; knowing what your own numbers are will help you make decisions about the costs and benefits of participation.  If you're just starting a program to raise alumni participation, consider the following veteran advice: 1) make your efforts to increase participation part of a careful long-range plan; 2) estimate your costs and set your goals realistically; 3) concentrate on your best participation prospects to get the most growth for your money, and; 4) don't forget the basics. Raising participation may cost you now, but the payoff should be even bigger in a few years.  Includes a sidebar article with a table that shows the fund raising cost ranges and averages for participation programs at different types of institutions. Also includes a sidebar profile of the participation programs at Oregon State University.

Fisher, Wendy. "Donors at What Price?  Donor Evaluation Exercises May Seem Exhausting, But They Will Pay Off in Helping You Make Sound Decisions For Your Donor Efforts," Fund Raising Management 26, no. 9 (November 1995): 36-39.

The author presents a series of questions that nonprofit organizations should pose to determine the total cost involved in acquiring, soliciting, nurturing, upgrading and recognizing donors. Development staff should consider the types of donors needed, what they are willing to do to find quality prospects, communicate an image and mission, and offer premiums or other benefits for donors of various gift levels.  In addition, the author discusses how to determine reasonable acquisition costs, how much should be spent on cultivation and renewal.

Franklin, Peter and Keating, Elizabeth K. "The Numbers Game: How Important Is It?," Nonprofit and Voluntary Sector Quarterly 10, no. 1 (Spring 2003): 4-6.

Gilmore, Charlotte Ann. "An Analysis of Fund-Raising Activities for the Solicitation of Private Donations at Selected Public Community Colleges," Ed.D. diss. University of Memphis, May 1996. 104 pages.

This research study sought to identify those activities that appear to have significant impact on the amount of private dollars donated to public community colleges. The primary purpose was to determine if there were any significant relationships between five fund-raising activity categories and the expenditures by the institutions for these selected fund-raising activities. Because there is no     mandated annual data collection by state or federal education agencies, the information on fund-raising activities at public community colleges is limited to surveys by professional organizations, graduate students, and professional individuals interested in the field. The population surveyed in this research projected included all the two-year public colleges that held membership in the Council for Advancement and Support of Education (CASE) in 1995. Of the 95 public two-year colleges that were members of CASE, 61 institutions in 29 states participated in the study. The respondents were asked to rank order donations from five fund-raising categories and expenditures for these same fund-raising activities. Data analyses included descriptive statistical procedures, a Pearson product-moment correlation coefficient, ANOVA, the multiple regression techniques. The results of the study indicated that donations by individuals constituted the largest source of private donations, followed by donations from special campaigns and events. Donations by large businesses was ranked third, and donations by small businesses was ranked fourth. The fifth and    smallest source of donations was from alumni. When expenditures activity was ranked, the institutions were spending the most amount of money on special events and campaigns, followed by expenditures related to large business donations.  Expenditures to solicit individual donations was ranked third, and expenditures to obtain small business donations was ranked fourth. As with donations, the institutions ranked expenditures for alumni activities as the fifth and smallest cost item. This research provided    information related to the efficiency and management of selected fund-raising activities at two-year institutions. Additional knowledge about the types of fund-raising activities, the ranking of donation sources, and the related fund-raising expenditures     resulted from this study. As the public community colleges become more active participants in the fund-raising arena, research concerning donor activities and the associated costs will be important to resource development efforts. [Abstract supplied by the author]

"Giving USA: Research About Fundraising and Administrative Costs," Giving USA Update no. 2 (2003): 8 pages.

Greenfield, James M. "Gift Size vs. Amount of Recognition: Balancing Your Donor Club Budget," FRI Monthly Portfolio 35, no. 6 (June 1996): np. In budgeting donor club expenses, the author suggests that for a donor club of up to 500 members, the costs should not exceed 20 to 30 cents for each dollar raised. It is important to seriously consider the manner in which donors at each level are recognized. A sample budget is included. For example, the cost per donor for recruitment and renewal mailings may be $.50, while the cost for newsletters may be $1.00. Donor recognition costs range from $10 per donor for identification cards to $40 per donor for a luncheon. The total annual cost per donor as outlined in this example is $200. The total cost includes mailings and other communications (such as directories or annual reports), donor recognition, and other donor relations costs, (such as special reports and birthday cards). This information is excerpted from the author's book, Fund-Raising Cost Effectiveness: A Self Assessment Workbook.

Greenfield, James M. Accountability: Program Performance and Profitability: How to Assess Fund-Raising Program Performance. Falls Church, VA: Association for Healthcare Philanthropy, 1994.

Greenfield, James M. Fund Raising Cost Effectiveness: A Self-Assessment Workbook. New York, NY: John Wiley & Sons Inc. March 1996. 333 pages.

This workbook provides a step-by-step process to evaluate fund-raising campaigns as well as the total development program.

Hager, Mark A. "Is Grant Proposal Writing a Fundraising Expense?," Nonprofit and Voluntary Sector Quarterly 10, no. 1 (Spring 2003): 24-28.

Hager, Mark, Patrick Rooney, and Thomas Pollak. "How Fundraising is Carried Out in US Nonprofit Organisations," International Journal of Nonprofit and Voluntary Sector Marketing 7, no. 4 (November 2002): 311-324.

Hall, Michael H. Charitable Fundraising in Canada: Results of a National Survey of Fundraising Practices of Canadian Charities. Toronto, ON: Canadian Centre for Philanthropy, 1996. 128 pages. A national survey of 1,516 non-religious, public foundation charities shows that: 1) 38 percent operate with less than $125,000 in revenues; 2) 86 percent do not have paid fund-raising staff; 3) 70 percent of funds raised from individuals are given to those charitable organizations with revenues over $1.5-million, while only five percent of gifts from individuals are given to the smallest organizations, and 4) half of all funds raised from individuals go to charitable organizations in Ontario. The survey also shows that direct mail campaigns, special events, planning giving and capital campaigns provide the largest revenues from fund-raising efforts aimed at individuals. Charitable gaming provides the largest source of revenue for organizations in Manitoba and Saskatchewan, capital campaigns are the largest source for Alberta and British Columbia, and unsolicited gifts provide the largest source for the Atlantic provinces. These charities raise 30 percent more from individual donations than from government, foundation or corporate grants. In terms of fund-raising costs, more than half of the largest nonprofits use cost ratios to calculate their costs, while only 29 percent of the smaller nonprofits surveyed use this method. Separate chapters address fund-raising methods used and revenues gained from these methods, funds raised from government, foundation and corporate sources, fund-raising costs, the use of consultants and percentage-based fund raising, the role and practices of boards of directors, and the need for standard and ethical practices.  Numerous tables and charts are included.

Hall, Michael H. and Laura G. Macpherson. "Is There a Need for Standards in Fundraising Practice?," Canadian Centre for Philanthropy Research Bulletin 3, no. 2 (April 1996): Toronto, Canada: Canadian Centre for Philanthropy, np.

Harr, David J., James T. Godfrey and Robert H. Frank. Common Costs and Fund-Raising Appeals: A Guide to Joint Cost Allocation in Not-for-Profit Organizations. Landover, MD: Nonprofit Mailers Federation, 1991. 135 pages.

Harrison, W. B., S. K. Mitchell, and S. P. Peterson. "Alumni Donations and Colleges' Development Expenditures," American Journal of Economics and Sociology 54, no. 4 (October 1, 1995): 397

Harrison, William B. "College Relations and Fund-Raising Expenditures: Influencing the Probability of Alumni Giving to Higher Education," Economics of Education Review 14, no. 1 (1993): 73-

Harvey, James W. and Kevin F. McCrohan. "Fundraising Costs--Societal Implications for Philanthropists and Their Supporters," Business and Society Review 27, no. 1 (Spring 1988): 15-

Hedgepeth, Royster C. How Public College and University Foundations Pay for Fund-Raising. Washington, DC: Association of Governing Boards of Universities and Colleges and Council for Advancement and Support of Education, 2000. 24 pages.

Heemann, Warren. Analyzing the Cost Effectiveness of Fund Raising: New Directions for Institutional Advancement, no. 3. Edited by Warren Heemann. San Francisco, CA: Jossey-Bass Publishers, 1979. 91 pages.

"Incremental v. Average Fundraising Costs," Philanthropy Monthly (April 1989): 40.

Kim, Eun-Kyung. "Group Gives Standards to Rate Charities," Yahoo! News (March 3, 2003): np.

Kuniholm, Ronald. "How to Evaluate Your Mailing Results: Part II: Factoring in Telephone Calls, New Prospects Mailings," FRI Monthly Portfolio: FRI Bulletin 35, no. 10 (October 1996): np.

The results of two direct mail appeals of an imaginary nonprofit organization are used to illustrate factors to consider when evaluating final results. Factors include the number of pieces mailed, number of gifts received, percent response rate, total gross income, average gift size, total net income, cost-per-dollar-raised, and net-income-per-thousand-pieces-mailed. It is also important that staff and volunteers agree on the objectives to be achieved and acceptable costs to be incurred. Costs involved in acquiring new donors are also discussed, with the understanding that mailing costs may exceed the gift income received for these first-time mailings.

Lammers, Jennifer A. "Know Your Ratios? Everyone Else Does," Nonprofit and Voluntary Sector Quarterly 10, no. 1 (Spring 2003): 34-39.

Lee, Stephen. "Benchmarking Charity Fundraising Costs: A New UK Initiative," International Journal of Nonprofit and Voluntary Sector Marketing 8, no. 1 (Spring 2003): Henry Stewart Publications, 5-11.

Mapp, Jerry W. "A Call for Consistency in Cost Accounting," Fund Raising Management 25, no. 10 (December 1994): 26-27.

McMillen, Liz. "A Study to Determine the Cost of Raising a Dollar Finds That Average College Spends Just 16 Cents," Chronicle of Higher Education 37, no. 1 (September 5, 1990): A31-A32.

The Council for Advancement and Support of Education and the National Association of College and University Business Officers sponsored a study of potential guidelines that educational institutions could use in comparing fund-raising costs. The study, "Expenditures in Fund Raising, Alumni Relations, and Other Constituent  (Public) Relations," examines 51 institutions during the     period of 1986-1988.

Moore, Rebecca. "Creating a Comparable Cost of Fund Raising: No One Can Tell What the Future Holds, But It Is Certain That Increased Diligence and Candor in the Reporting of Financial Performance Are Imperative If Fund Raisers Wish to Avoid Unnecessary Regulation," Fund Raising Management 27, no. 3 (May 1996): 41-45.

The author examines traditional and new processes used to calculate fund-raising costs. Evaluation of fund-raising costs provides the basis for objective goal setting, a chance to verify and review program strengths and weaknesses, and the data needed to establish productivity and efficiency standards. The use of the Philanthropy Program Assessment System model is proposed. This model views all fund development programs as consisting of three layers of expenses and revenues: core, program and work in progress. Core layer revenues and expenses are those generated by basic programmatic activities. The program layer includes earned income and general office expenses. The work in progress layer looks at expected gifts.

National Society of Fund Raising Executives. Guidelines Useful to Not-For-Profit Organizations for Evaluating the Appropriateness of Their Fund-Raising Costs. Alexandria, VA: National Society of Fund Raising Executives, 1994. 2 pages.

To assist nonprofit boards of directors in evaluating the return on investment in fund raising, the National Society of Fund Raising Executives' Evaluation of Fund Raising Costs Task Force prepared  these guidelines. The Task Force suggests these  factors be taken into consideration: 1) the age and size of the organization and its development department; 2) the fact that different fund-raising (capital campaigns versus annual fund campaigns, special events, or major gift campaigns) methods yield different returns, and 3) the location of the organization. Additional factors include: 1) the profile of the constituency; 2) the popularity of the cause, and 3) the level of competition for funds within the community. Questions to consider when dealing with vendors are also included.

"Operation Accountability," Philanthropy Matters 13, no. 1 (2003): Indianapolis, IN: Center on Philanthropy at Indiana University, 2003. pages 4-10.

Overholt, Alison. "Charitable Deductions: Charity Navigator Dares to Hold the Nation's Nonprofits Accountable for Their Fund-Raising.," Fast Company Magazine no. 73 (August 2003): Boston: Gruner + Jahr USA Publishing, 46.

Pollack, Thomas H. and Rooney, Patrick. "Management and General Expenses: The Other Half of Overhead," Nonprofit and Voluntary Sector Quarterly 10, no. 1 (Spring 2003): 30-32.

Raffa, Thomas. "The Challenge with Fundraising Costs and Multi-Year Grants," Nonprofit and Voluntary Sector Quarterly 10, no. 1 (Spring 2003): 29.

Rehder, Kristin V. "Seeing the Light: In Times of Economic and International Instability, Fund Raisers Can Still Make the Case for Education- and Ask for a Gift," Currents 29, no. 4 (April 2003): Washington, DC: Council for Advancement and Support of Education, 22-28.

An informal online survey of more than 30 development veterans offers strategies for building and sustaining support despite a recession, problems with the stock market and state and federal budgets, and military actions. Advice includes continuing to conduct asks of leadership prospects, emphasizing the value of the institution's mission, focusing on the most resonant priorities, and promoting creative forms of giving. This article is of interest to campaign and major gift fund raisers.

Ryan, Ellen. "The Costs of Raising a Dollar: A Four-Year Study Has Produced Workable Standards For Capturing Comparative Costs Useful to Leaders in Fund Raising, Alumni Administration, and Public Relations," Currents 16, no. 8 (September 1990): 58-62.

Perception mirrored reality, according to a CASE and National Association of College and University Business Officers study funded by the Lilly Endowment, Inc.  The average cost of 16 cents per dollar raised conforms closely to the common estimate that it costs 15 cents in staff and overhead costs to collect a dollar. The four-year study quantitatively confirmed fund raisers' suspicion that they are worth their weight in gold: most institutions spend just 2 percent of their educational and general (E&G) budgets raising funds, but gifts account for 10 percent of the E&G budget.

The study standardized quantitative definitions for fund raising cost analysis that will allow even more consistent data keeping for future studies. The study focuses on information relevant to E&G budget analysts as well as alumni relations and public relations departments, and represented a variety of professionals at 51 American colleges and universities. On average, each fund raising professional raised an average ranging from $500,000 to $1.1-million in gift income per year over the course of three years. When support staff costs were factored in, the revenue decreased to a median of $430,492. Even with this level of variation, the average fund raising staff solicits and receives in gift money an amount that exceeds a fund raiser's salary by a factor of 10 or more.

Saftig, Dan. "Financial Pie Charts: Do Donors Interpret Them Correctly?: A Study Shows That Known and Educated Donors Have a Much Different Interpretation of the Traditional Disclosure Statement Than the Professional Explanation Behind Them," Fund Raising Management 24, no. 6 (August 1993): 20-

Salmon, Jacqueline L. "Watchdog Group Sets Benchmark For Charitable Organizations:  Better Business Bureau Seal Aimed at Guiding Donors," Washington Post (March 4, 2003): np.

Sharpe, David. A Portrait of Canada's Charities: The Size, Scope and Financing of Registered Charities. Toronto, ON: Canadian Centre for Philanthropy, 1994. 90 pages.

Simic, Curtis R. "Turn Up the Cash Flow: A Dozen Ways to Pipe in More Money to Cover the Cost of an Institutionally Related Foundation," Currents 11, no. 4 (April 1985): 38-40.

Simon, Marion. "Are You Doing a Good Job?  Evaluation and Benchmarking the Fund-Raising Function," FRI Monthly Portfolio 35, no. 7 (July 1996): np.

Evaluation and benchmarking processes help nonprofits assess how to allocate resources for improved and cost-effective results.  While it is critical for nonprofit organizations to compare themselves with others, it can be difficult to collect data on peer organizations. Consider these steps to collect data about how much others raise, the sources, and costs involved: 1) ask about budgets when attending conferences; 2) review annual reports or IRS 990 forms, and 3) offer to exchange information with colleagues. In addition to collecting data about peer organizations, it is also important to evaluate your own organization's     performance. The best approach is a quantitative analysis of fund-raising history, budgeted costs, actual costs incurred, revenues, and projected trends. It is also important to take the age of the program into account, along with an analysis of donor giving trends by category of donor. Establish baseline data, time lines and performance objectives that can be used for future evaluations.

Smallwood, Stephen J. "Measuring Fund-Raising Costs," Currents 5, no. 1 (January 1979): 18-21.

Strom, Stephanie. "With a Lawsuit Pending, Charities Are Divided Over Disclosure," New York Times (February 2, 2003): np.

Strosnider, Kim. "New Standards Will Help Colleges and Other Groups Measure Fund-Raising Costs," Chronicle of Higher Education 44, no. 30 (April 3, 1998): A39.

The American Institute of Certified Public Accountants has released standards outlining how to account for costs of special events and mailings associated with fund-raising activities. The standards define, for example, the criteria that must be met before a nonprofit (including educational institutions) may allocate these costs to something other than fund raising.

Teitelbaum, Robert D. "An Approach to the Measurement of Unit Costs in Higher Education Fund-Raising," Ph.D. diss., College of William and Mary in Virginia, 1977.

Teitelbaum's purpose was to produce a costing system based on the principles of cost accounting but adapted to the needs of an institution of higher education. A pilot costing system was designed to fit the development structure of one institution. There were 13 evaluators professionally involved in the field of higher education financial development who appraised the system and rated it as to the degree to which the stated goal and objectives of the project had been achieved. There were five producing divisions, three service centers, and 23 fund-raising programs defined in the development office of the pilot institution. (Abstract taken from Research in Institutional Advancement: A Selected, Annotated Compendium of Doctoral Dissertations by A. Westley Rowland.  Washington, DC: Council for Advancement and Support of Education, 1983.)

Tinkelman, Daniel Peter. "An Empirical Study of the Effects of Accounting Disclosures Upon Donations to Nonprofit Organizations," Ph.D. diss., New York University, October 1996. 109 pages.

This dissertation empirically addresses two sets of questions related to the role of accounting information in influencing donors' allocation decisions. The methodology is similar to that used in research on the effect of accounting information on stock prices of public companies. Regression analysis is used on a database of summary information for approximately 7,000 organizations filing reports with New York State from 1992 to 1994, and on more detailed information from a hand-collected sample of 191 organizations' 1990 to 1992 financial reports.

The first set of empirical tests relates the sensitivity of donations to the 7,000 organizations to an accounting indicator of prior year efficiency. The measure is closely related to the ratio of program expenses to total expenses.  In general, the data indicate a positive relationship between donations and this measure of efficiency.  Prior research on this issue had produced conflicting     results.  I discuss the sensitivity of results to both the form of the empirical model and to underlying organizational characteristics that affect the relevance and reliability of the accounting measure. The second set of empirical tests relates to the influence of the classification of joint costs of fund-raising and public education on donations. The classification of these costs is controversial because it affects the accounting ratios used by many donors as efficiency measures. Current accounting rules require footnote disclosure of how this cost allocation. Whether the classification actually affects donations has not previously been studied.     Using the 191-organization sample, which was comprised of organizations that have public education programs, I used nonlinear regression analysis to test for an association of joint costs with subsequent donations. The results indicate that donations from individuals are not adversely affected by joint costs, while donations from other sources (corporations, legacies, and foundations) seemed to react as if the costs were considered fund-raising expenses by these donors. I also noted that individuals generally seemed less sensitive to ratings from monitoring agencies, a quality measure, than the other donors. Some of these results may be due to the relatively higher cost to individuals of obtaining information about non-profit organizations.

United Way of Canada/Centraide Canada. Cost of Fundraising Guidelines. Ottawa, ON: United Way of Canada/Centraide Canada, 1998.

Vale, Norma. "Dollars and Sense: Figuring Out What Fundraising Costs," Front & Centre 2, no. 1 (January 1995): 1, 18-19.

Warwick, Mal. "Coming to Grips with Fund-Raising Costs: Fund Raising Must Be Able to Explain Why Fund Raising Costs Money.  It's Really Nothing More Than Describing Some of the Hard Work That Goes into Our Job," Fund Raising Management 25, no. 9 (November 1994): 16-20.

Warwick, Mal. "Fundraising Ratios and Other Deceptions," Nonprofit Times (August 1990): np.

Wildern, William J. "Cost Control: A Personal Balancing Act: Rid Yourself of the Word Spend. Substitute Invest.  Spending Never Has Been an Acceptable Component of Effective Cost Control. Investing Always Has Been and Always Will Be," Fund Raising Management 25, no. 9 (November 1994): 24-26.

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