Fundraising Costs to High?

Nothing raises eyebrows as quickly as the accusation that an organization has spent too much on fundraising. The usual suspect is a telethon or a direct mail campaign with costs typically between 40-60 percent. Most recently the television show Dancing with the Stars received criticism for having paid forty-percent to fundraising company. In a similar story, the New Zealand charity KidsCan was criticized for telethon costs which apparently opened a can worms raising questions about salaries, promotions, etc.

I agree- too much is too much. And yet as a practitioner with a perspective as good as some and better than others, I insist that regardless of whose numbers you are looking at they are never quite what they seem. And I would forever defend of an organization that spends sixty-percent of my dollar if they have the greatest impact with what’s left.

The Heritage Company writes:

Evaluating a nonprofit’s success, sincerity, fidelity, ethical standards, and societal value on the basis of its cost of fundraising is a dull tool to use for a task requiring surgical accuracy. It is clear from numerous surveys that donors generally prefer that their gifts be used to further the nonprofit’s mission rather than be used for fundraising costs. However, that view is akin to wanting one’s tax dollars to support the cause of national defense by paying for fighter jets, but not for the copy paper used by employees in the Pentagon. Just as planes do not get used effectively in battle without proper planning, so does a nonprofit’s mission depend upon fundraising.

In my book, measuring fundraising costs is an internal control of costs and to measure increased productivity. From the outside, don’t show me fundraising ratios- show me real results, an impact in the community, and lives changed for the better.

.