Cost per Dollar

“What percentage of my donation will go to the cause?”

This is probably one of the most common questions faced by charitable organizations engaged in fundraising. Coming from a place of good intentions, it reflects that donors want their charitable contributions to be used in the best way possible to achieve their philanthropic objectives – whether that be to support higher education, improve the life of someone in need or find a cure for cancer. And for better or worse, this question has become synonymous with how a “good” charity is defined.

And yet, those of us in the fundraising milieuknow that this ratio is not always the best indicatorof a charity’s performance or worthinessfor investment. We also understand that theratio itself, while seemingly simplistic, is actuallyvery complex. And because of that complexity,it defies simple and straightforwardguidelines, not to mention direct comparisonsbetween charities.

Unfortunately, there is no easy answer to the question of the cost of fundraising. Whether as board members, staff, volunteers or donors, one needs to be careful about oversimplifying the issue. Determining the appropriate mix and blending of fundraising programs and costs for an organization requires insight, analysis and good judgment. It is important to thoughtfully assess what investment is needed in fundraising staff and programs, and to measure regularly how that investment impacts the achievement of the organization’s overall mission and goals or those of the institution you support.