REALTOR® Magazine Online: How Much Should You Spend on Fundraising?

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How Much Should You Spend on Fundraising?

This question is the Mona Lisa of philanthropy—the eternal puzzle. Donors don’t like to think of their dollars going to administrative purposes. But, without good administration and—yes—good fundraising, the resources necessary to operate a charitable organization and to allow it to pursue its mission won’t be available to it.

Less is more. Generally speaking, for a young philanthropy, the less spent on fundraising versus what is spent on realizing the objectives of the organization, the better.

Shoot for 10 percent. As a guideline, it’s not inappropriate to invest 8 to 10 percent or so of your organization’s annual budget in fundraising-related costs. Some larger organizations, such as universities, spend a good deal more, but they’re most likely soliciting larger and more geographically dispersed potential donors than you.

Ask for contributed goods and services. Be sure to use volunteer help and gifts in kind to reduce the amount you spend on fundraising. For example, see if a local printer will produce flyers or other materials for you for free or at cost.

Separate your fundraising expenses. Keep your tallies of costs for general administration and fundraising separate, even if you have to prorate time and services. Report these figures individually unless specifically requested to state them as one.

And just use good sense. There are times when you really do have to spend money to make money. If you don’t market your organization and its cause appropriately to potential donors, you very likely won’t achieve the resources you need to do what you want to do.

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