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How Much Does Fundraising Cost?
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 |
$0.25 per dollar raised |
Benefit/Special Events |
$0.50 of gross proceeds |
National Average |
$0.20 |
The Association of Fundraising Professionals sites similar numbers.
Fundraising Activity/Method |
Average Cost to Raise One Dollar |
Capital Campaigns |
$0.05 to $0.10 per dollar raised. |
Corporations and Foundations (Grant Writing) |
$0.20 per dollar raised. |
Direct Mail Acquisition (with a 1% or better rate of return) |
$ 1.25 to $1.50 per dollar raised. |
Direct Mail Renewal (with a 50% or better rate of return) |
$0.25 per dollar raised. |
Planned Giving |
$0.25 per dollar raised. |
Benefit/Special Events |
$0.50 of gross proceeds. |
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.
For a comparison of costs associated with fundraising online, see our online
fee comparison table.
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