What is the cost?

Recently I was talking to a donor and he wanted to know the fundraising cost of the charity. Canada Revenue Agency (CRA) is very specific about how charities calculate this cost so I shared it with him. However, I felt it was also necessary to inform him about the value of effective administrative supports because this helps charities accomplish their mission.  

In addition to investing in fundraising, a healthy charity should also be investing in accounting, information technology (IT) and human resources. For example, out-dated IT systems may limit an organizations ability to compile and report on the impact of its work. I would encourage organizations to be comfortable informing their donors and funders about the importance of strong support services.

So how do we know if a charity is doing a good job and making a difference in the community? One indicator would be the number of people that use the charities services. I would encourage donors to visit the organization they plan to invest in, look around, this will give you an understanding of the work and help you get to know the staff there. You may not be able to speak to a client however you should be able to speak to the Executive Director and program staff.

Donors need to be asking the charities they support questions.  However, in addition to “What is your fundraising cost?”, we need to ask about the impact of their work, how they measure this and what would happen to their clients if this charity did not exist.