To measure Return on Investment (ROI), the total investment in fundraising, or fundraising expense, is analyzed against the net revenues generated from fundraising. But ROI is not the only important metric. A similar metric is Cost to Raise a Dollar (CRD), which is the mathematical inverse of ROI and a figure that many nonprofits believe is equally important. In looking at these figures, organizations can better understand the value of their fundraising activities and determine how the costs to carry out one activity compare to the costs to carry out another activity. “Measuring ROI is important, and it is a long term process,” says Maehara, “It enables you to be more efficient in your fundraising operations.”
Sample worksheets for measuring fundraising return on investment, as well as worksheets for measuring the returns from prospect research, may be found in Appendix 1 (download the full report for the worksheet). These worksheets were designed to help evaluate the success of an organization’s prospect research and screening efforts and determine how the investment in prospect research has impacted the organization’s fundraising programs. They should be considered as a template for individual organizations to use to establish their own ROI benchmarks and to evaluate their fundraising performance.
Depending on the components of your fundraising program, you may want to measure your results in planned giving, annual fund leadership solicitations and other fundraising activities.