Fund Raising Seminar:Donor Recognition and Gift Clubs

EVALUATING THE ANNUAL FUND

First developed for the CASE Conference on Annual Giving in 1983, this presentation has been refined and improved over time. It was last presented at the CASE Conference on Annual Giving in October 18, 1995 in Philadelphia, Pennsylvania. My intent is to stimulate constant information gathering and analysis to improve the effectiveness of every fund raising program.

Outline

• Measuring costs

• Net productivity

• Cost effectiveness

• Return on investment

• Looking at programs

• Departmental budgeting

• Market place demands

Measuring Costs
Fixed Costs	Salary Rent Overhead
Variable Costs	Postage Phone Stationery
Total Costs	$____________

Net Productivity
Revenue	$100,000
(Expenses)	-$10,000
Net	$90,000

Cost Efficiency
Cost Effectiveness = Cost / Revenue

Cost Efficiency Ratio
0.1 = $10,000 / $100,000

**Revenue Analysis**
Mailing	20,000.00
Response Rate	0.20
Donors	400.00
Total Gifts	100,000.00
Average Gift	250.00

**Simple Cost Analysis**
Gift Income		100,000.00
Fixed Cost Labor: (50 hours x $25/hour) Overhead:	1,250.00 350.00
Variable Cost Labor: (20,000 x .10) Postage: (20,000 x .32)	2,000.00 6,400.00
Total Cost Net CE		-10,000.00 90,000.00 0.10

**Gift Level Anaylsis**
	1,000	500	250	100	0	Total
Donors	10	40	100	250	19,600	20,000
Dollars	25,000	25,000	25,000	25,000	0	100,000
Cost	-5	-20	-50	-125	-9,800	-10,000
Net	24,995	24,980	24,950	24,875	-9,800	90,000
CE	0.0002	0.0008	0.002	0.005		0.1

Return on Investment
ROI = $ Net / $ Invested

**ROI by Gift Level**
	1,000	500	250	100	0
Invested	5	20	50	125	9,860
Net	24,995	24,980	24,950	-9,860	0
ROI	4,999	1,249	499	199	-1

**Look at your Programs**
	1,000	500	250	0
Direct Mail
Phone-a-thon
Personal Solicitation
Total

**Program Cost Analysis**
• Cost per dollar raised
• Cost efficiency
• Return on investment
• Analysis by gift level
• Analysis by program

**Program Analysis**
• Augment effective programs
• Drop ineffective programs
• Improve marginal programs

**Program Budgeting**
• Budget is based on program effectiveness
• Costs related to the audience and delivery system
• Costs are double checked for accuracy

**Continual Quality**
• Test approaches to each market
• Develop the best delivery systems for each market
• Measure the results
• Modify the strategy and methodology based on empirical data

**Donor Expectations**
In a world that is: Right sizing, Re-engineering and Re-organizing
Donors will expect you to be: Efficient and Effective

Solicitation Cycle • Methodology • Seminars • Clients • Background
Strategic Alliance • The Software • Contact Form • E-mail • Home

Seminar Links
Quality Value Fund Raising • Evaluating the Annual Fund • Service Leadership
Donor Recognition • Recruiting Volunteers • Research for the Annual Fund • Prospect Management