| Return On Investment (ROI) is a fundamental | | | | you. Less people contacted means less money |
| business concept. It's also something that every | | | | contributed. |
| fundraiser needs to take into consideration. | | | | Remember, it doesn't always take money to make |
| A business investment consists of working capital, | | | | money, but not spending money where it is really |
| physical assets, and people's time. ROI is the net gain | | | | needed can seriously impact your results. |
| that results from a business spending money and | | | | Put an ROI value on your fundraising volunteers time |
| utilizing physical assets, along with the expenditure of | | | | Another important ROI point to remember is the |
| employees' time, in an effort to produce tangible | | | | value of each volunteer's time. Each volunteer-hour |
| profits. | | | | worked to raise money for your fundraiser should at |
| So, the "investment" in a fundraiser consists of:any | | | | least be equivalent to minimum wage. Otherwise, |
| up-front expenditures that are requiredthe costs | | | | your group is wasting their time by not working |
| associated with the assets that are utilizedthe value | | | | smart. |
| of people's time spent fundraising | | | | An example would be spending a total of 1,000 |
| Some key points about ROI in fundraising: | | | | volunteer hours coordinating an auction event that |
| 1) Analyze your up-front expenditures vs. your net | | | | only raised $5,000. Chances are that many groups |
| gain | | | | would be happy with the $5,000 net, but the ROI on |
| 2) Lowering costs boosts your ROI, but maybe not | | | | everyone's time was marginal. |
| your net | | | | Put an ROI value on your merchant partners |
| 3) Always consider the hourly value of each | | | | In this instance, you want to maximize the value of |
| volunteer's time | | | | everyone's time by giving them specific tasks and full |
| Put an ROI value on upfront expenditures | | | | instructions. Don't take a scattershot approach by |
| The most important point is to analyze all of your | | | | going all the area merchants and asking for donations |
| up-front spending versus the net gain from each | | | | of merchandise. |
| expenditure. Obviously, don't spend money if nothing | | | | Instead, develop rapport with those merchants by |
| is actually gained. | | | | providing value for them all year long before you ask |
| One example would be evaluating advertising | | | | them for a large donation. |
| expenses for a capital campaign. Before you commit | | | | Ways to improve your fundraising ROI |
| to it, run a small series of test ads to determine the | | | | Focus your efforts where you'll get positive |
| response rate. | | | | responses and avoid wasting your time on |
| If you don't get the desired response, either revise | | | | unproductive endeavors. |
| your ad campaign or consider not spending any more | | | | Each person who helps out in a fundraiser is offering |
| money on advertising. | | | | their time in exchange for something that benefits |
| Look for areas where the returns are greatly | | | | everyone. |
| magnified for every dollar spent. This generally | | | | Give them specific assignments that focus on |
| includes effective publicity, quality communication, | | | | maximum results. Don't waste people's time or you |
| targeted prospect lists, and timely reminder | | | | will discourage future participation. |
| campaigns. | | | | Why your fundraising ROI is important |
| Put an ROI value on cost reduction vs. net profits | | | | Watch your ROI. It's a good indicator of the health |
| Lowering costs boosts your ROI measurement, but | | | | of your non-profit organization. If the number is too |
| your net can be impacted by the lack of investment. | | | | low, your group will be constantly recruiting people to |
| If there is an area where money spent in the past | | | | replace those who aren't interested anymore. |
| produced excellent results, then be sure that this | | | | Your donors and volunteers won't return because |
| year's plan provides additional investment capital for | | | | their time wasn't valued, they saw their money being |
| that effort. | | | | wasted, and they also saw penny-pinching where |
| A good example involves possibly cutting the funding | | | | open purse strings would have been a better solution. |
| for your capital campaign mailing. Sure, you can cut | | | | Design your organization to maximize your fundraising |
| your expenses by not mailing to anyone that didn't | | | | ROI and you'll position your group for success for |
| respond last year. | | | | many years to come. |
| However, the law of large numbers will catch up to | | | | |