A study from Campbell & Company and researcher Slover Linett Strategies provides important insights for nonprofits that are examining fundraising expenses and budgets. The web-facilitated survey of more than 300 nonprofits found that fundraising campaigns during the past decade have provided strong returns on investment, with 68 percent of respondents reporting spending less than a nickel for each dollar raised. The study also found that the majority of respondents were spending less than five percent of their operating budgets on fundraising. "This research answers many questions organizations have about how campaigns can be funded, while at the same time confirming the value campaigns provide toward advancing the missions of nonprofit organizations," said Peter Fissinger, president of Campbell & Company.
The survey gathered campaign funding and budget information from nonprofits that have undertaken capital or endowment campaigns within the past 10 years. The amount of money organizations spent on their campaigns varied widely, with some paying for campaign expenses out of the existing fundraising budget and others creating a separate campaign budget that hit seven figures or more.
Thirty-seven percent of respondents funded their campaign entirely through the institution's operating budget, a strategy more common among healthcare and K-12 education organizations than others. Seventeen percent included the campaign budget needs in the goal. Less common funding sources included the institution's operating reserves, a designated gift from one or more trustees or donors, or a change in the endowment draw policy or spending plan.
When asked what they would do differently in budgeting or funding their next campaign, 31 percent of survey respondents said they would engage in a more formal campaign planning process, and 23 percent indicated they would more carefully monitor budget expenses. Seventeen percent said they would budget for additional staff, and 13 percent said they would build budget expenses into the campaign goal from the outset.
Other key findings from the study include:
- Most respondents currently in a campaign reported feeling the impact of the economic downturn. Fifty-one percent said they have extended the campaign timeline, but only 11 percent had lowered the campaign goal.
- The size of the campaigns reported ranged from less than $1 million to $1 billion or more, with a median campaign size of $13 million. Higher education institutions (with a median of $40 million) and arts and culture organizations ($20.3 million median) had the largest campaigns.
- Higher education and arts and culture organizations also reported the largest campaign budgets, with a median of approximately $1 million for both groups.
- The average campaign spending plan budgets 39 percent for staff, 22 percent for consultants and 19 percent for marketing, and the rest for additional costs such as events, travel and office expenses.