Philanthropies Need A Better Way To Measure If Their Fundraising Is Successful

Charitable groups have developed lots of ways to ask for money. That ranges from broad, impersonal salvos like telemarketing and direct mail, to double-down tactics like asking current givers to attend an upcoming gala or other kind of open-the-wallet event. All of which begs an obvious question: How far does your dollar really go after it’s deducted from the cost of the chase?

Traditionally, nearly everyone in the sector has answered that question with what’s called the “fundraising cost” equation, a ratio of how much money it takes per dollar to raise what your group actually ends up with. (Take the total expenses used to raise the money, including staff time, and divide it by what the group nets.)

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Ben Paynter, Fast Company