Comments on: Financing Not Fundraising: Abandoning Ineffective Fundraisers

By: Nell Edgington

Nell Edgington — Wed, 29 Aug 2012 15:39:16 +0000

Joseph,

Thanks for the comment, and I’m glad you liked the piece!

I realize that my cost to raise a dollar formula differs from the traditional nonprofit cost to raise a dollar formula because I use net revenue in the denominator instead of gross revenue. This is because I am mirroring the for-profit return on investment formula which has net investment value (gain from investment – cost of investment) in the denominator. I think nonprofits should understand the return on investment of their fundraising activities, so gross revenue is a meaningless figure in that understanding. You need to understand what it cost you to make a profit and that is the ROI formula. Hope that helps.

By: Joseph Griffin

Joseph Griffin — Wed, 29 Aug 2012 15:25:39 +0000

I wonder about your formula for computing “cost to raise a dollar.” It seems more appropriate to use gross revenue rather than net revenue in the denominator. The example presented in “how to do those calculations” shows a gala making a modest profit with a cost to raise a dollar of $3.35. This is more confusing that using the intuitive notion of gross revenue/cost. Using this definition of cost to raise a dollar yields $0.77 which provides a truer picture of the gala’s fundraising efficacy.

Overall, this was a compelling piece full of good advice, however one does the calculations.

By: Financing Not Fundraising: Abandoning Ineffective Fundraisers | Entrepreneuriat, Management & Créativité pour Entreprises sociales | Scoop.it

Wed, 29 Aug 2012 05:54:42 +0000

[...] Key to any smart nonprofit financing strategy is an analytical approach to focusing on your most profitable activities. Part of this requires calculating the cost of fundraising of every revenue-generating activity your organization engages in. [...]

By: Nell Edgington

Nell Edgington — Tue, 28 Aug 2012 14:22:34 +0000

Thanks Tina, I appreciate it!

By: Tina Crouse

Tina Crouse — Tue, 28 Aug 2012 14:13:27 +0000

Nell: I always appreciate your direct and concise expert advice. “Gather your Lists: Abandon, Evaluate, Invest” If only people would do it!