Fundraising is a major activity in the voluntary sector
The amount spent by the voluntary sector on generating funds in 2012/13 was £4.9 billion. Just over 80% of major and 70% of large organisations report spending on fundraising in activities that aim to generate voluntary income (donations), or in fundraising trading costs and investment management. This is in contrast to only 32% for micro and 44% for small organisations both less likely to employ professional fundraisers.
12.4% of the sector’s budget is spent on fundraising
The cost of generating funds has increased in absolute terms and as a proportion of the overall expenditure since 2000/01 (12.4% compared to 10.2%) while remaining relatively stable, between 11.4 and 12.5 in the last 7 years. Our current estimates put it at 11.6% in 2013/14.
Money well spent: £4.20 was raised for every £ spent on fundraising activities
Charities spend on fundraising and publicity with the aim to generate income for their activities. In order to do so, they employ professional fundraisers, organise events, contact potential donors directly etc. In 2012/13, for each pound spent on fundraising and generating voluntary income, £4.2 was raised. Our data shows that, although spending on fundraising has increased in the last years, it can yield significant results for those who can afford it.
Micro and small charities with significantly smaller fundraising budgets are shown to out-perform large and major ones, according to our fundraising ratio definition:
Different ratios tell different stories
A more general definition of fundraising ratio takes into account all income, irrespective the source, over the total amount spent on generating funds:
Alternatively, we can define the ratio of all reported fundraised income over spending on fundraising and publicity. This generally gives a lower yield, as it fundraised income often gets classified as voluntary income:
Finally, the amount of voluntary contributions over the amount spent to encourage this income can be another indicator. For reasons explained above, it tends to be much higher than the fundraising ratio.