ow do I count fundraising costs to determine the average per dollar raised?
The average cost per dollar raised is a frequently asked question but the answer is less meaningful if you’re trying to compare dissimilar charities who have traditionally allocated costs differently. With continued media attention, the cost of raising money is in the forefront of many people’s minds. It’s important that the leadership team (board and chief executive) take fundraising costs seriously but it’s hard to ensure we’re comparing apples to apples.
I’ve covered the Canada Revenue Agency’s Fundraising Guidance in July and November 2009 but to recap, its purpose is “to support registered charities to comply with reporting requirements related to fundraising, and encourage them to self-assess their fundraising activities.” Therefore, overseeing the proper allocation of fundraising expenses is one of the main priorities of their policy.
CRA considers the fundraising ratio (receipted and un-receipted donations against the expenses incurred to cultivate, raise, and steward the funds) as only one factor in their analysis. This ratio is calculated by line 5030 “total expenditures on fundraising” divided by line 4500 “receipted gifts except enduring property” plus line 4630 “non-tax receipted amounts from fundraising”.
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Courtesy of Charity Village.