I read with interest this morning the latest philanthropic trends report delivered by KCI Ketchum, which you can read here. Thanks to KCI firstly for releasing this.
Actually, I read more with angst than interest. The fixation by our sector (not donors) on 'cost to raise a dollar' bugs me for four reasons:
1 We perpetuate the problem ourselves. Organization's claiming that they spend no money on fundraising and administration set unrealistic expectations for the rest of us.
2 It's a storm in a tea cup. When was the last time someone told you they don't or haven't supported you because you are not fiscally responsible? Or the last time a donor left you because they weren't happy with your ratios? Or the last time you asked a donor why they support you and they responded with "I am passionate about your low administration costs".
Give me a break.
Ron Dumouchelle, President & CEO, VGH & UBC Hospital Foundation says, “however, in our experience, it is not an issue that is often brought to us directly by our donors.
3 We spend an exorbitant amount of time worrying about this. I'd argue time that could be spent more effectively, actually fundraising.
And finally, but probably most importantly..
4 Cost per dollar ratios are flawed.
As Innes van Nostrand, Vice Principal, Upper Canada College says in the KCI article, "..The way this ratio is positioned with the public leaves the impression that a low cost per dollar raised indicates good overall performance on the part of the organization..
..The problem is that the ratio doesn’t take into account other factors that are critical to how well an organization is performing – factors like the quality of services, the kind of fundraising being done, the longer term outcomes of programs or even whether donors gifts are being used as intended. As a result, for most charities, I don’t think it is wise for it to be the sole or primary indicator of a charity’s performance or worthiness for investment..”
Here, here Ingrid. Couldn't have said it better myself.
Let's stop the obsession with this and get on with doing what we do best. Fundraising.