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Here are the topics that Expert Fundraiser needs your help with:

• Raising money from local businesses
• Facebook fundraising
• How to run a silent auction
• How to manage third-party fundraising events
• How to use social media to raise money for your next special event
• How to get free radio, TV and print publicity for your charity or event
• How to organize and run a walkathon or run
• How to organize and run a fundraising dinner
• How to organize and run a fundraising gala
• 101 products to sell at your next fundraiser
• How to raise funds with online peer-to-peer tools and team fundraising webpages
• How to use YouTube for fundraising
• Where to look for grants
• How to write a grant proposal

Net revenue is the money you have left over after you subtract your fundraising expenses from your fundraising income. Net revenue is the only money you can do mission with. The more net revenue you have, the more good you can do in the world.

You would think that board members would encourage their charities to raise as much net revenue as possible. But plenty of them don’t. They instead obsess over fundraising costs, and pressure their fundraising staff to cut fundraising costs wherever possible.

This is foolish and short-sighted. It’s the equivalent of cutting your office energy costs in half by not heating in winter and not air conditioning in summer. And losing all your employees.

It’s the equivalent of travelling to a famine-stricken area of Africa with life-saving supplies, but choosing the cheapest method of travel, row boat, instead of a Boeing 777, arriving three months late, and everyone having died while you were in the middle of the Atlantic Ocean saving money.

People who obsess over fundraising costs instead of net revenue are looking at the wrong end of the horse. You discover the health of a horse by examining its eyes, ears, nose and gums. The other end doesn’t tell you much.

Arbitrarily cutting your fundraising costs is foolish if it reduces your net revenue, wouldn’t you agree?

Increasing your fundraising costs is wise if it increases your net revenue, wouldn’t you agree?

Remember that there are only three ways to increase your net revenue:

1. Reduce your costs
2. Get donors to increase the size or frequency of their gifts
3. Get more donors

To persuade donors to increase the size or frequency of their gifts, you have to increase your fundraising costs (by mailing them more often, for example). To get more donors, you have to increase your costs.

Naturally, if you can reduce your costs without reducing your net revenue, you should. For example, if a fundraising letter printed in black raises just as much money as a letter printed in colour, but costs less to print, you should print in black. But if printing in colour brings in more net revenue, despite it costing more, you should print in colour.

If your board demands that you cut costs, insist that you cut costs for the right reason. And there’s only one right reason. Cut your fundraising costs not because cutting costs is always good (it ain’t). Only cut if doing so boosts your net revenue, because boosting net revenue is always good.

If cutting your fundraising costs boosts your net revenue, cut. If increasing your fundraising costs boosts your net revenue, increase. Keep your eye on the right end of the horse and you’ll raise more money, and do more good with it to change the world.

The metric to watch in fundraising is not cost. It’s cost-effectiveness. We fundraisers have to spend money to make money. How much we spend, and when we spend it, and how we spend it, should be determined not by some arbitrary number on our budget but by the return we anticipate from spending that money.

Five of the silliest words ever spoken in the English language are, “That’s not in our budget.”

What many members of volunteer boards fail to grasp is that increased spending must precede increased income. If you want your bequest income to increase, you must first increase your spending on promotion (think brochures, letters, advertisements, seminars). If you want your major gift income to increase, you must first increase your spending on identification and cultivation (think database research, travel, solicitation materials).

So the question your board should be asking is not, “Can we afford to spend this much?” but rather, “What is the anticipated return if we spend this much?”

I’ve seen this first hand. I worked for a brief while at a non-profit that eventually laid me off because they ran short of money. I was their chief development officer, the one they hired to boost their income, but, when money got tight, they laid off the very person who could have raised more money for them, if they had only been willing to spend money first.

To persuade your board or your executive director to spend money in a tight economy, you need evidence. If you have proof from past campaigns that you can spend 23 cents and raise a dollar, show that proof. If you can demonstrate from a test mailing to a rented list that you can acquire new donors at a cost of only $11 each, and that they will pay for themselves within seven months and have a lifetime value of $892 and six years, show that proof as well.

Warren Buffet and Bill Gates don’t like to spend money any more than your board does. But they like to spend money if the anticipated return on their investment is attractive. That’s why they spend billions of dollars a year on acquisitions that show up on the Costs line of their budgets. Invite your board to look at the Income line of those same budgets. You’ll justify your salary.

Handbook Number 26 Raise Funds in a Recession. Twenty-seven development professionals describe how to raise funds, cut costs and retain donors in an economic downturn.

Handbook Number 5 Boost Your Revenues and Donor Loyalty with Effective Donation Thank-You Letters. Master the single most important letter in direct mail fundraising.

Direct Mail Fundraising ROI Calculator. Automatically calculate the 10 most vital formulas for measuring the return on investment (ROI) of your direct mail, with this special calculator.

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