Is Cost to Raise a Dollar an Important Metric?

I have worked for an array of nonprofit organizations throughout my long career. Each organization was different, as each focused on different programs. Universities took pride in having solid annual giving programs. Hospitals focused on major gift programs. My organization, The Salvation Army, has had an outstanding planned giving program through the years. In fact, of the 11 organizations I have represented over many years, the best cost-to-raise-a-dollar ratio has been with my current employer.

During my seven-year tenure, the cost has been no higher than $0.18 for each dollar raised. My organization is proud of the fact that they strive to stretch every dollar generated to assist the most in need in the communities we serve.

According to the Affinity Resources, the standard that many use when identifying an appropriate cost per dollar raised for annual fundraising around $0.20 for every dollar raised. This number has its origins in the book, “Fund-Raising: Evaluating and Managing the Fund Development Process,” in which James Greenfield observed the following costs that are 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/Foundations                                                    $0.20 per dollar raised

Direct Mail Acquisition                                                           $1 to $1.25 per dollar raised