Fundraising Action Items and Expenses vs. Revenues

Below is a spreadsheet I've created that outlines annual fund "action items" for our end-of-the-year fundraising drive and associated expenses. The far right column shows cost or estimated cost of said activity. Many of the actions have no or minimal associated cost because they are in the form of phone calls or emails. The "big spender" is the postcard I will mail first class to everyone in our database - right around 13,000 households. To print just over 13,000, we're looking at $1,000. To mail them, we're looking at over $3,000. This alone is more than one third of our total annual fund spending (in printing, postage, etc.) for the year. I know it's important that we do this (our whole database what we've got for potential donors - of course, I am continually doing what I can to add and clean; I've been collecting and correcting contact information at shows, from surveys, from raffle ticket purchases, etc.), but spending this amount of money does make me nervous because we really have no idea how many of these addresses are good or how many of these people maintain a connection with The Cedar. Then again, we sort of have to find out the answers to these questions at some point unless we just want to only work with current donors (ignoring our mailing list for appeals) and adding to our pool only when we add new donors who might be roped in from website, show, or the newsletter. In the end, a strategy that doesn't use our mailing list will not build the base of support we need for The Cedar grow.

You probably can't read the spreadsheet following very well, but the images might give you an idea of how I've organized and kept track of targets, communications, and associated costs of fundraising actions.

The following is a summary of 2007 annual fund appeals and associated expenses, where applicable. This list has basically the same information as my spreadsheet, but it offers some different information and is organized differently.

Target: Current/Lapsed Donors - Renewal

Contact(s) to donors in first half of 2007
• Jan/Feb: Winter 07 Letter Estimated expense $400
Specs: This was sent ONLY to lapsed donors – those who gave 2000-2005, NOT those who gave 2006.
Description: A solicitation letter signed by Sue and personalized with a hand-written note from a house manager or board member.
• Email inviting patrons to take our survey and advertising the McKnight matching challenge
Specs: Sent to all for whom we have email addresses (e-newsletter and ebase) - about half of our donors are included in this.
• April: Summer 07 Mailer Estimated Expense $550
Specs: This was sent to 2006 and 2007 donors. The only people who would have received BOTH the winter 07 letter and the summer 07 mailer are those who didn’t give in 2006 and did give from Feb-April 2007. This was the first contact in 2007 with donors who gave in 2006.
Description: A “memo” thanking donors, announcing results of McKnight Challenge, asking donors to help us by encouraging friends to donate, solicitation to those who haven’t given yet in 2007, and invitation to take the survey.
Enclosures: two pledge forms w/return envelope, sticker, brochure, 2 newsletters.
• Email at the end of the season
Specs: Sent to all for whom we have email addresses (e-newsletter and ebase) - about half of our donors are included in this.

Sept: Connect with The Cedar
• Invitation to Connect with The Cedar Estimated Expense $700
Specs: Sent to donors 2004 – 2007 and a few scragglers from earlier years
Description: Invitation to donor reception. Solicitation in P.S.
• Email to Connect with The Cedar
Specs: Those who received invite for whom we also have email addresses
• Phone call to encourage attendance and solicit
Specs: A small handful of those who received invitations
Description: Calls from board members

Oct/Nov: Fall 07 Letter
• Email asking for feedback on our fundraising messages.
Specs: All donors for whom we have email addresses (approx. 300)
Description: Asking for their input on why they donate and how to build our fundraising case
• Mailer asking for feedback on fundraising messages, announcing campaign, soliciting donors no gift 2007 Expense: $1,235
Specs: All donors with postal addresses (who didn’t respond to email, approx. 600)
Description: Announces the campaign, asking for feedback on our fundraising messages, solicits those who didn’t give 2007, soft ask/asking for help acquiring donors from those who have given in 2007.
Enclosures: Letter with “feedback form” on the back, a one-page with “fundraising case” messages, a pledge form and return envelope.

Nov/Dec: Campaign solicitations
• Campaign Mailer Estimated Expense: $760
Specs: Sent to donors 2004-2006 (2007 donors?)
• Newsletter with insert Estimated Expense: $300
Specs: Sent to all who receive newsletter (all in database not coded “Bad/No Address” or “Do not mail.”
• Campaign email
Specs: Separate email sent to 2004-2006 no gift 2007 and 2007 donors
Description: Announces the campaign, solicits
• End of the year phone call
• “Last chance” email end of December

Dec/Jan
A follow-up thank you/donor report/And You? Buttons.

Ongoing
Thank you note after receipt of donation. Estimated Expense: $250

Target: People in our database (either post or email lists) – Renewal, Acquisition
(includes donors and non-donors)

Efforts to increase this pool: Postal and e-newsletter sign-ups at shows, database cleaning/updating, gathering information/contacts from survey and entering them into the database, collecting information from raffle sales at NRF

Contact(s) to people in our database in the first half of 2007
• Email inviting patrons to take our survey and advertising the McKnight matching challenge
Specs: Sent to all for whom we have email addresses (e-newsletter and ebase) - about half of our donors are included in this.
• Email at the end of the season
Specs: Sent to all for whom we have email addresses (e-newsletter and ebase) - about half of our donors are included in this.

Nov/Dec: Campaign Solicitations
• Campaign Postcard Estimated Expense: $4,428
Specs: Postcard sent first class to everyone in the database for whom we have a postal address and whose record is NOT coded “Bad/No Address”
• Newsletter with insert
Specs: Sent to all who receive newsletter (all in database not coded “Bad/No Address” or “Do not mail.”
• Campaign email
Specs: Separate email sent to 2004-2006 no gift 2007 and 2007 donors
Description: Announces the campaign, solicits
• “Last chance” email end of December

Target: Patrons - Acquisition
(people to come to shows and who may or may not be donors or in our database)

Efforts to increase this pool/to improve communication with this pool: Improved the website.

Fall 07
• NRF Raffle sales – email/solicitation from collected addresses
• Email to those who took the survey announcing results, winner, campaign, w/solicitation

Nov/Dec Campaign-related activities
• Campaign Bulletin board/posters at shows
• Campaign announcements at shows
• Campaign newsletter insert at shows
• Campaign related “Donor Guide,” pledge forms, donation box available for info. at shows

Throughout the year
• E-newsletter and postal newsletter sign-ups at shows
• Bulletin board announcements (expense included in “poster on ourside window)
• Announcements
• Pledge forms, printed donation information Estimated Expense: $254

Target: General Public – Acquisition

Nov/Dec Campaign-related activities
• Poster on outside window(s) Estimated Expense: $199
• Newsletter
• Website

Other: Targeted acquisition/Increase
April - Acquisition
• Acquisition/introduction mailer to a sample of people on the Walker’s donor list Estimated Expense: $250
Specs: Some people who give a lot to the Walker whose addresses I was able to find on whitepages
Description: A letter introducing The Cedar, inviting them to get involved, Live at The Cedar CD, Cedar brochure, campaign to an upcoming show

Oct-Dec - Increase
• Coffee Meetings
Specs: Current Donors
Description: Asking donors to give at the $1,000/year level
• Letter to the 30-60 households targeted for personal visits?
• Holiday card from the staff?
Specs: A holiday or new years card to the 60 or so households targeted to be solicited at the $1,000 level

Nov/Dec – Businesses/Organizations
• Appeal to businesses/organizations
Specs: businesses/orgs affiliated with The Cedar over the years
Description: Business/org “levels” of giving or sponsorships?


I’ve estimated a total of $9,571 will be spent in fundraising expenses by the end of 2007. This is about 2% of our operating budget (total operating expenses at $487,278.) This includes printing and postage, mainly. Expenses are described and itemized on the spreadsheet. Keep in mind that this does not include administrative costs.

Including administrative costs, an estimated $59,600, about 12% of our operating budget, is spent on fundraising expenses.

“Charity Navigator” is an organization/website that rates charities based in several categories. http://www.charitynavigator.org/index.cfm?bay=content.view&cpid=35 The Cedar has not yet been evaluated by Charity Navigator. The organization/website looks at an organization’s 990 to get its information.

One of the evaluation categories is “fundraising expenses” which evaluates the percent of the operating budget spent on fundraising expenses – lower being better. It’s not entirely clear whether administrative costs should be included in these expenses; there is a separate category for an “administrative expenses” evaluation. Here are fundraising expenses vs. operating expenses for some other Minnesota arts organizations according to Charity Navigator:

Minnesota Opera 10.6%
Walker 5.8%
Guthrie 5.9%
American Composer’s Forum 10.5%
Artspace 6.0%
Children’s Theater 8.9%

If you don’t include administrative expenses, The Cedar spends a way smaller proportion than other organizations on fundraising expenses. If you do include administrative expenses, we’re slightly higher than other organizations.

Charity navigator also evaluates based on fundraising efficiency or amount of money spent to raise a dollar. If we only look at annual fund giving (not foundation or corporation grants), and we don’t include administrative costs (I’m assuming administrative costs aren’t included here because administrative costs are another category; also, administrative costs would have to be weighed in against money raised from foundations), we spend 9 cents per dollar raised.

Budgeted dollars to be raised in 2007 $105,000
Estimated Dollars spent not including administrative $9,571
$0.09 spent per dollar raised

Compare this to other institutions/organizations fundraising efficiency according to Charity Navigator:

Minnesota Opera $0.13
Walker $0.05
Guthrie $0.6
American Composer’s Forum $0.13
Artspace $0.19
Children’s Theater $0.09

Charities Review Council, an organization that evaluates non-profits in Minnesota lists the following spending:

The Cedar 19.5% on management and 3.8% on fundraising
Walker 24.8% management and 5.3% on fundraising
The Guthrie 10.7% management and 6.2% fundraising
Minnesota Opera 19% management and 10.6% fundraising

Some things to consider:
Institutions like The Walker or the Guthrie are well-established and have been engaging patrons in fundraising campaigns for a long time. Because of this, it can probably be assumed, for example, that Guthrie and the Walker’s mailing lists are cleaner and more robust (therefore more effective) than ours. They’ve had the time and have already spent the resources (presumably) to clean them and develop the most effective prospective donor base. At The Cedar, we are doing this now.

The ways that evaluative entities critique organizations should be taken with a grain of salt. These are not necessarily the best ways to evaluate organizations and it isn’t really possible to evaluate all non-profit organizations (many with very different missions and operations) on an objective scale. Consider the following blog entry written about Charity Navigator http://www.netsquared.org/blog/holden/ever-taken-good-look-charity-navigator

An interesting article from the Milwaukee Journal I found posted on Charity Navigator’s website states that although Milwaukee area charities were evaluated as “spending their money wisely” – that is, spending about 8.7 cents per dollar raised on average –area charities are also struggling to increase revenues and grow overall. The article is here http://www.jsonline.com/story/index.aspx?id=613346

An article written in Chronicle of Philanthropy http://www.philanthropy.com/free/update/2007/05/2007051002.htm points out that these numbers can be apocryphal. Numbers aren’t necessarily always reported, recorded, or compared accurately.

Because of the robust marketing budget and efforts of institutions like The Walker and The Guthrie, they have to spend less to raise more. Obviously, the more dollars an institution spends on marketing probably means the better and more prevalent the organization’s reputation and the larger number of patrons thus the larger number of potential donors. Consider the case of Harvard University. Harvard raises by far the most money of any institutions of higher education in this country and probably the world. Many donors to Harvard aren’t even alums and aren’t even solicited by the institution – they just give because it’s “Harvard.” Because of its reputation and history, Harvard probably has to spend far less for each fundraising dollar raised. Obviously, The Cedar isn’t at a point yet where it is reaping benefits from a comprehensive marketing campaign or historical reputation.