5 Responses

  1. Sean Triner
    Sean Triner December 8, 2015 at 6:58 am

    We need to ‘reframe’ cost of fundraising (and administration). In annual reports we can say something like:

    ‘Of your $1 donation, 20% goes to ensuring the long term future of by being used to raise another dollar, 5% goes on recruiting and training the right people to help, 5% goes on costs to ensure we are legal, have the right software, efficient computer systems, licences, secure databases to protect your information, and transparency.

    Finally, around 4% goes on quality control and measuring the impact of your dollar.

    We can do much more good with 66c in the dollar when it is spent wisely than 99c with ineffective support systems.’

    Generally, worrying about cost of fundraising is distracting and although people say they worry about it, donors rarely have an idea of the cost of fundraising of their favourite charities.

    Try this old exercise on your board or SMT.

  2. Patrick Kilby
    Patrick Kilby December 7, 2015 at 7:04 pm

    I agree with Garth. The biggest cost of fundraising is donor acquisition and a disaster is the lowest cost donor acquisition (sorry for sounding callous). This report has chosen some interesting base years. 2002 and 2007 both at fundraising peaks and low donor acquisition costs, the latter due to the tsunami. A better idea would be to go back another 10 or 20 years. Most of the data needed is in ACFID annual reports. I looked back 50 years but not cost of fundraising which is a very cyclical figure and as such hard to draw patterns (or conclusions) from

    1. Jonathan Pryke
      Jonathan Pryke December 8, 2015 at 3:08 pm

      Hi Patrick,

      We decided to operate on a 10 year time series as that’s about as far back as a lot of NGOs publish their annual reports online. While it may be possible to get overall revenue figures from ACFID there’s no escaping the need to access every individual NGO annual report for the expenditure side of the equation, and unfortunately the data just isn’t readily available beyond 10 years. Picking the ‘right’ baseline may also be arbitrary if fundraising costs are indeed cyclical, but I think the stats Garth highlights below from the Asian tsunami onwards still illustrate an interesting, and somewhat worrying, trend.

      Regards,

      Jonathan

  3. Terence Wood
    Terence Wood December 7, 2015 at 2:49 pm

    Hi Garth,

    Obviously I don’t know for certain, but that seems like a very plausible explanation to me.

    cheers

    Terence

  4. Garth Luke
    Garth Luke December 4, 2015 at 10:55 am

    Thank you all for this interesting analysis. Using the data you provide, the fundraising to donation ratio overall is:

    2003 17.8%
    2004 17.0%
    2005 11.7%
    2006 14.1%
    2007 12.7%
    2008 13.4%
    2009 14.9%
    2010 16.7%
    2011 17.3%
    2012 18.1%
    2013 18.8%

    The Indian Ocean tsunami in late 2004 dramatically boosted fundraising and acquisition of donors. Do you think it is possible that the increase in fundraising ratios since 2006 is largely the result of the tsunami’s impact on donations and the gradual drop out of those new donors acquired in 2005?

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