When you are thinking about expanding an area of your organization’s fundraising — whether that’s major gifts or events or email campaigns, it can be useful to ask yourself: what’s the potential versus the pain?
Really, that’s just a silly, alliterative way of asking: What’s the Return on Investment (ROI)? The basic idea is: If you are thinking about growing a particular income stream, consider things like the resources you have at your disposal, the potential for additional funding, and what it’s going to cost your organization (in terms of cash, time, other opportunities you’ll have to give up, etc.), and then ask yourself… is it worth it?
Here are a few examples:
Let’s raise more money from our annual gala!
- In order to bring in more money from ticket sales, will you need to substantially change the event (so you can charge more per ticket and/or have a lot more people there)?
- If you can change the event in order to accommodate more people at a certain price point, are you confident that you’ll be able to attract more attendees at the higher price?
- Will you net more income, after you pay off the event’s higher expenses?
- Who is in charge of this event, and who is helping them? For the staff involved, do they have time to work on this, and what other duties will have to take a back seat while they are working on the event?
- How much more money can we reasonably project we can raise, and is that potential worth the pain?
Let’s raise more money from our email appeals!
- This is, in large part, a game of percentages. If you want to bring in substantially more money from email appeals, you’ll have to substantially grow the number of people on your list. Do you have ways of doing that? If your list is small now, what will you do differently in order to add people? Remember, you can’t add people to your email list without their permission — they need to opt in.
- Who will own this? Will someone be available to create a calendar that outlines 12 months of email appeals and then oversees the creation of text, graphics, etc.? What else will they not be able to do while they are working on this?
- How’s your database? Can you send different appeals to different people based on when they last gave, specific programs or events they’ve been part of, or other ways that they are connected to your organization? If you ask someone to donate, they make a gift, and then six weeks later you ask them again, you might lose that donor.
- How much more money can we reasonably project we will raise, and is that potential worth the pain?
It might seem like some of these questions are of the “rain on my parade” variety. Why be such a downer, Lauren?!
If you put in time, money, and effort into growing these income streams, if you sacrifice other projects so you can turn your attention to this endeavor, and in the end you don’t raise that much money or, even worse, you lose money, that’s going to be an even bigger downer. If it’s a good idea to expand the income stream, the idea will stand up to scrutiny. Better to scrutinize now, be prepared, and reap the rewards when the work is done.
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