Cliff's Notes on Bill Levis

Below are summaries of the essays Bill Levis has contributed to the Fundraising Productivity Series.

Average Gift Size

The most common way to measure the efficiency of an organization's fundraising efforts uses the ratio of the total amount spent on fundraising divided by the total amount raised, often called the "fundraising ratio". Levis argues that average cost per gift is a much superior indicator. The average cost per gift is the total amount spent on fundraising divided by the number of gifts received. As a general rule, the cost to acquire a gift varies depending on the size of the gift. Larger gifts cost more per gift, but much less per amount raised. Hence, organizations that receive large gifts will have lower fundraising ratios than organizations that depend on many gifts of smaller size.

Funding Fund Raising Report

This study reports on the experiences of foundations in funding capacity building, i.e., fund raising. The study concludes that funding capacity building was a clear aim of many foundation grants and that there should be greater investment in capacity building, chiefly by enhancing an organization's human resources and by taking advantage of proven fundraising techniques such as matching gift campaigns and planned giving programs.

Increased Giving

Bill Levis argues for an increased investment in fund raising. Just as companies grow by increasing their productive capacity, nonprofits should grow by increasing their investment in fund raising. Levis offers 9 rules for guiding this increased investment. Among other recommendations, he suggest that nonprofits divide their fundraising into distinct categories and recover fundraising costs from gifts as they are received. This would allow successful fundraising programs to grow while less successful efforts would diminish or be revised to improve their performance.

Questions Donors Ask

Donors want reliable, objective information about the performance of charities to which they contribute. Comparing the ratio between various quantities, such as the ratio between fundraising cost and total revenue, is one way to satisfy this demand. However, since there is disagreement over which ratios to use, it is proposed that all of the elements necessary for all the ratios be publicly reported, thereby allowing each evaluating party to calculate their desired ratios and draw their own conclusions.

The Realities of Fund-Raising Costs and Accountability

Since there are distinct types of fundraising activities, it makes sense to evaluate fundraising efficiency by fundraising category. Six categories are delineated: new donor acquisition, donor renewal, special events, capital programs, deferred gifts, and indirect campaigns. Each category has its own range of reasonable cost per revenue ratio.

ROI Analysis

This paper offers a comprehensive method for evaluating any nonprofit's fundraising programs. Fundraising is divided into ten categories (including corporate/foundation grant seeking and government grant seeking, two categories not separately mentioned in the Realities of Fund-Raising essay). Levis suggests viewing fundraising in terms of its return on investment and evaluating performance relative to reasonable expectations for each fundraising category.
--Cliff Landesman

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