Fundraising costs
How much does an NGO spend on fundraising compared to program spending?
A US-based organisation, Smart Givers, has set a standard for the NGOs it accredits, with at least 70% of the organisation’s annual expenses going towards program activity and not more than 30% for management/general and fundraising combined.[2]
However, comparing the fundraising costs of NGOs can be problematic. There are a number of factors affecting fundraising costs that have little to do with efficiency, accountability or transparency, including the size of the organisation and the initial costs of developing a public profile.[3]
All NGOs should be open to public scrutiny on the strategies behind their fundraising activities. Ethical fundraising should provide donors with clear information on an organisation’s purpose and programs rather than exploiting people’s guilt. When presented with emotive images and little information, it is worth asking questions about the specific activities and projects the organisation engages in. See here for more tips on donating responsibly.It is the responsibility of an organisation to be accountable to their members and financial supporters.
Fundraising activities
An organisation’s fundraising activities are influenced by organisational factors such as resources, organisational values and priorities as well as external factors such as fundraising regulations.[4]
Common fundraising sources and strategies:
- Canvassing/Face-to-face solicitation
- Grants from government, trusts and foundations
- Media advertisement
- Mail-outs
- Membership
- Merchandise sales
- Door knock appeals
- Roadside collections
- Special events
- Online donations
Last updated 4 November 2010
[1] Report of the Committee of Review, One Clear Objective: poverty reduction through sustainable development, Canberra: AusAID, 1997.
[2] Charities Review Council (no date), Statement of Accountability. Online: http://www.smartgivers.org/sites/623b9026-c292-4f47-9b9d-8aac6d22782d/uploads/Accountability_Standards_with_Philosophies.pdf Accessed 12 June, 2008.
[3] Fundraising Institute Australia, Research on Key Issues in Fundraising, 2004. Accessed at http://www.fia.org.au/AM/Template.cfm?Section=Home
[4] Fundraising Institute of Australia, Research on key issues in fundraising, 2004. Online http://www.fia.org.au/Content/NavigationMenu/Fundraising_Resources/FIA-Principal_research_findings.pdf, accessed October 2010