Fundraising Return on Investment (ROI)
Revenue raised for every dollar spent on fundraising activity
What is Fundraising Return on Investment (ROI)?
Fundraising return on investment is the income raised for every unit spent on fundraising. It shows how much a charity gets back from its fundraising budget.
It is the reverse of the cost ratio, and helps decide where to put fundraising resources.
How this KPI is measured
- Function
- Fundraising & Income
- Sub-function
- Campaign Performance
- Industry
- Not-for-Profit / Charity
- Type
- Lagging
- Impact
- Financial control
- Unit
- x
- Measurement frequency
- Quarterly / Annual
- Formula
- Total fundraising income / Total fundraising expenditure
How to calculate it
Divide total fundraising income by total fundraising expenditure.
For example, if a charity raised 1,000,000 by spending 250,000, the return is 4, meaning 4 raised for every 1 spent.
Calculate it by channel and campaign, and remember that some investments, such as donor acquisition, may be loss-making at first and pay back over the donor's lifetime.
Where it is used
Allocating fundraising budget
Invest where returns are best.
Evaluating campaigns
Compare results.
Making the case for investment
Show trustees and funders.
How to improve it
Tips and common mistakes
- Acquisition often costs more than the first gift raises.
- Use a consistent cost definition.
- Look at multi-year returns.
More Fundraising & Income kpi library
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