DickersonBakker Blog

The 500 Calorie Fundraising Diet for Nonprofits

Is your fundraising program malnourished?  

Recently, an executive director proudly shared her annual report with me, as she wanted to get my opinion on it.  The document was nicely laid out with all of the normal sections of a nonprofit annual report including financials.  One number in particular stood out to me: the agency only spent 2% of their budget on fundraising.  I pointed this out and asked the executive director about it.  She replied, “Our donors love it!”  When I asked her how the fundraising was going and the smile left her face; it was not going well.

Nonprofit agencies work very hard to keep their fundraising costs low.  However, there is a difference between being thrifty and being wise.  Fundraising on only 2% of your budget is a lot like eating a 500 calorie per day diet.  2% is just not enough to sustain a healthy organization, and it was starving this nonprofit. 

“But what about the donors?” you say. “Don’t they want fundraising costs to be low?”  Yes, but more and more, donors are looking for impact, not ratios.  If you are a free clinic, are your patients actually getting healthier?  If you are a homeless shelter, do your residents find permanent housing?  What donors do not want is for nonprofits to be gorging on a 5,000 calorie per day diet and wasting donor dollars.

So what is right for your agency?  Much like calorie recommendations change by the person, appropriate fundraising expense ratios change by the agency.  A healthy range for most organizations is between 10-20%, but remember the ratio is only a number.  The key question is “Does it make sense for your organization and your goals?”

Are you counting your fundraising calories? Contact DBA & let our team of consultants show you how to increase your fundraising impact. 

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