Return On Investment (ROI) is a fundamental business concept. Its also something that every fundraiser needs to take into consideration.
A business investment consists of working capital, physical assets, and peoples time.
ROI is the net gain that results from a business spending money and utilizing physical assets, along with the expenditure of employees’ time, in an effort to produce tangible profits.
So, the investment in a fundraiser consists of: any up-front expenditures that are required the costs associated with the assets that are utilized the value of people’s time spent fundraising
Some key points about ROI in fundraising:
1- Analyze your up-front expenditures vs. your net gain
2- Lowering costs boosts your ROI, but maybe not your net
3- Always consider the hourly value of each volunteers time
Put an ROI value on upfront expenditures
The most important point is to analyze all of your up-front spending versus the net gain from each expenditure. Obviously, don’t spend money if nothing is actually gained.
One example would be evaluating advertising expenses for a capital campaign....
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