Good Question: Return on Investment for Fundraising
Q: How do we determine the return on investment in our fundraising operation? One way is to calculate the cost to raise $1, but do you have information on other methods? Are staff salaries typically included in calculations?
A: Determining return on investment (ROI) is a perennial topic, and members increasingly ask the Library about fundraising metrics and ratios. It makes sense that tightened budgets and other factors have fueled an increased need to demonstrate the ROI for advancement operations. Calculating the cost to raise $1 or £1 is one way institutions—and often donors—assess fundraising operations, though other methods provide a more complete picture and help make the case for investing in fundraising and other advancement functions.
The Library has compiled this collection of resources on ROI for fundraising to help members learn about metrics and related issues to consider. The collection links to articles that focus on the education sector, as well as those in journals and other sources that cover nonprofits generally. The collection is not comprehensive; instead, staff compiled the most current resources on the topic and included only a few published before 2000. Whenever possible, links to full text are provided.
In addition to this collection, members may want to consult the Good Question about gift officer metrics, which has resources about calculating the return on investment for fundraisers.