Thursday, March 24, 2011

Cost of fundraising is the wrong measure

Several people at the AFP conference talked to me about how cost of fundraising (or required return on investment - ROI) was a challenging obstacle for their fundraising efforts. Especially if they were a small organisation or had a challenging 'type' of cause.  For example, it is easier to raise money for breast cancer than cystic fibrosis.

The state of Oregon in the USA is the latest place to totally misunderstand this concept.

Dan Pallotta tells you more here.  He also puts out a useful argument to present to your board about why it is the wrong measure.



cnukus said...

Found some interesting case

"Responses from the lapsed donors who appeared on other organisations active donor lists were double the opposing group"

Does that mean there are companies provide such detailed name/address matching between competing charities?

'Sean is always learning' said...

Indeed there are such companies. It all depends on the law and practice of different nations but this kind of thing happens in many mature fundraising markets. It may seem unsavory at first but I you think about it, it makes sense; charities are being thoughtful about their dollar and getting relevant communications to people.

cnukus said...

Thanks Sean.

You have mentioned data co-op such as AllianceData in another article "swap or die".

I guess this has to come from service provider like AllianceData.

Another question, how can charity benefit from Australia Post's life style survey you mentioned in that article?

'Sean is always learning' said...

You can swap direct with charities, but companies like AllianceDataDirect manage the process for you and increase the volumes you can swap.

Australia Post offer lots of good services for reaching potential supporters. The Life Style survey allows you to identify people who have, for example, ticked that they would consider supporting an animal charity. Response rates can be good, though volumes are often small.

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