Determining the True Cost of Fundraising
Fundraisers must remember to calculate these items to determine the true cost of an event: location rental or facility costs (even if the event is held at the organization’s facilities); food and service costs; consultant fees; design, printing and mailing costs; and staff costs related to planning, attendance and follow-up.
Appel said annual funds usually are high in cost to raise a dollar, compared to other fundraising methods.
“To be successful with an annual fund, a nonprofit really needs to identify those who are prospects for major gifts and build support for the mission,” she said.
Fundraisers must remember to include these items when calculating the true cost of an annual fund: design, printing and mailing costs; telephone calls or campaign costs; staff cost, including fundraising staff; and gift administration.
A major-gifts campaign can be very cost effective, but the return is unpredictable, the speakers warned.
“Major gifts can provide significant funding for projects or capital needs that would otherwise be impossible for an organization,” Appel said. But, remember, Lowstetter added, it’s essential to figure in staff and travel costs related to major gifts.
“Travel is often required to make that connection with a potential donor,” he said. “With costs going up, it can get pricey.”
To determine the true cost of major-gift campaigns, fundraisers must remember to calculate these items: gift-processing costs; status-reporting costs; travel and entertainment costs; and staff costs, including gift officer, president/executive director and gift administrator.
Since planned giving is very long-term in scope, Lowstetter said it can be decades until gifts are realized.
“These long-term gifts should be integrated into the total fundraising efforts,” he said. “It can be done economically — although it can be difficult to measure potential because it’s hard to prove until you realize the gift amount.”