In many circles the topic of how much nonprofits spend on their stated mission is a touchy one. Likewise, the topic of whether an expenditure of any kind in either the nonprofit, for-profit or governmental realms is also sometimes a (hot) debate.
Was/is the expenditure an investment or simply an expense?
To figure out the difference we can look at two extremes.
Buying copier paper is an expense while at the same time helping the nonprofit be productive in their mission.
Investing donated dollars in US Treasury Bills is an investment. (I know many will want to debate me on this but this is a relatively risk-free way to invest.)
While the former is a necessity the latter is something that I would hardly call productive. Yes, it’s relatively risk-free but is it the best use of funds?
Shouldn’t the nonprofit seek to deploy funds in ways that result in each dollar bringing in at least another dollar?
The average cost of a dollar in the nonprofit world is 20 cents. Put another way nonprofits have to spend 20 cents to make one dollar. In round numbers this means that on average each dollar a nonprofit spends on fundraising events, campaigns, etc. with the intent to raise money brings in $5.
In these terms the fundraising expense is an investment, clearly. Money/funds are allocated to the fundraising efforts and each dollar produces more dollars. Some would refer to this as ROI, return-on-investment.
And yet, if this is the case why do some nonprofits only see expense?
We have customers who regularly see each dollar they spend with us for our state-of-the-art mobile/tablet/PC giving tools result in a whopping $22 in giving!!
That is a 22-to-1 ROI.
Can you think of what Wall Street or Las Vegas would be like if this was the kind of ROI they were able to achieve month in and month out?
If your nonprofit always looks at just the cost side of things and not the “what did that dollar produce” side of things then you are like missing out because you’re solely focused on cost.
To me, from what I’ve seen our customers achieve in returns on their investment in frictionless fundraising on any screen in seconds through their RAZ Mobile account, I’d want as many dollars as I could find each out there working to bring in at least $20 each.
I see it happen every month with our customers.
Dale Knoop leads a great team working to make RAZ Mobile a powerful, international platform for any cause engaged in fundraising. Today, all causes globally need a content-rich mobile presence that can be shared through social media, email and other popular digital channels and best of all-quickly and securely process 100% of donations from motivated supporters with a minimum of friction in seconds with no passwords. If your nonprofit needs custom development of a mobile solution to fit your mission please click here. Dale holds multiple patents and applications for patent in the mobile space.