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.
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
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.
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.
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