Friday, January 07, 2005

Fundraising Puzzler

So you need to spend some more money on programming. Maybe you want to start a new local program. Or your NPR dues went up. You need $200,000 in new revenue. How much money do you have to raise every year to cover this new expense?

The answer is: About $300,000. Why? Raising money has a cost. Let's say your station spends 33-cents to raise a dollar, a little better than average for a public radio station. For every dollar you raise, just 67-cents is available for spending. It's simple arithmetic: $300,000 x $.67 = $201,000. Factoring in the cost of raising money, the fundraising goal has to be around 50% higher than your target.

It's an equation you can bank on. Just don’t forget to give the development department the $100,000 it needs to raise this money.*

* The actual cost of raising additional dollars will vary depending on the tactics used. For initial budgeting, the station average cost per dollar raised is a good rule of thumb.

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