Does Spending More on Fundraising Raise More?

Does Spending More on Fundraising Raise More?

July 06, 2011 by jga_admin

by Andy Canada

 

Does the old adage “you’ve got to spend money to make money” really hold true in fundraising?

The Nonprofit Research Collaborative (NRC) released its 2010 Nonprofit Fundraising Study earlier this year that found that generally speaking organizations that increased their investment in fundraising last year also raised more money.

While it’s not breaking news to hear that you need to spend money to raise money, the study also concluded that any increased financial investment also increased the likelihood that an organization would meet its fundraising goals – whether those goals increased in proportion to that investment or not.

Does this mean that everyone looking to improve their fundraising should just throw money at the problem? Definitely not!

The same study showed 24 percent of organizations that increased their investments in fundraising by 15 percent or more actually saw their giving stay the same or decrease. Not exactly the bulletproof evidence you want to take to your board if you are looking for a blank check for new fundraising initiatives!

So what should you make of these statistics?

In our work with clients we regularly see organizations that haven’t invested enough resources in their development programs, but I also see organizations that are over-invested, and others that have allocated the right level of resources but are using them inefficiently.

The key to improving any of these situations is to be strategic in your future investments.

While mission-related expenses will generally take priority over fundraising investments, nonprofit executives and boards should take note of the stats from the NRC.

Just like the stock market, there is no risk free investment in fundraising, but if you take the time to analyze your situation and invest confidently in a proven course of action, more likely than not, you’ll reach your fundraising goals.

As you look at your own operations, where do you fall on the scale? Are you spending a lot and not seeing a good return? Hoping that a minimal investment will beat the odds? Or have you found a good balance?