Is Cost to Raise a Dollar an Important Metric?

Direct Mail Renewal                                                                $0.20 per dollar raised

Planned Giving                                                                         $0.25 per dollar raised

Special Events                                                                         $0.50 of gross dollar raised

National Average                                                                    $0.20 per dollar raised

Obviously, results vary based on size of program and various variables at work. Mal Warwick, who has written extensively on fundraising, says the cost to raise a dollar idea is a myth. He believes there is no such standard due to the complex nature of nonprofit systems.

According to Charity Village, the cost of raising money is in the forefront of many people’s minds. The Canada Revenue Agency considers the fundraising ratio (revenue versus expenses) as only one factor in the analysis of a well-run organization. The objective is not to spend as little as possible but to maximize the dollars raised.

Additionally, according to Charity Village, costs of fundraising vary according to a variety of factors, such as age and maturity of the organization and development department, size of the charity and its budget, financial methods used, sources of raised income, use of volunteers and averaging costs. Four measures that need to be analyzed include percentage rate of return, average gift size, average cost per gift and overall cost percentage of fundraising costs by total contributions, multiplied by 100.