The costs of fundraising


How much does it cost to raise £1?

Fundraising costs money, and while as supporters we might want all the money we give to be applied directly to the cause, this is unrealistic. Most UK charities find that it costs between 15 and 25p to raise £1, but such topline figures can be very misleading.

Why are these figures misleading?

Fundraisers typically spend about 80% of their effort working with their existing supporters (donor development) and 20% trying to find new supporters (donor recruitment).

This is an important distinction as it costs most charities money to recruit new supporters.

Most recruitment activity is undertaken at an initial loss, with charities achieving a return of only 50-70p for every £1 invested. Of course undertaking this work does still generate a very satisfactory return, but it does so only over the full term of the relationship developed with each supporter.

Development activity generates a very good rate of return and it is not unusual for charities to achieve £4 - £5 back for every £1 invested. So the balance between recruitment and development activity adopted by a particular charity will drive the fundraising ratios it is able to report.