Fund Development

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 As your organization grows, especially when it diversifies, your needs change; from layers of management to administrative requirements, to physical space, change can be overwhelming.


While I can appreciate the fact you have needs, you are still limited by what you can afford; especially in the not-for-profit sector where funders are stuck on the 10% Administration figure.


Recently, we have been discussing a fund development position versus our current system where managers are chasing new funds off the side of their desk. But what does that look like, and how do you pay for it if you still only get 10% Administration, and that goes towards those core support functions? Even if you focus on unrestricted donations, you want to ensure these are not merely paying for the Fund Development activity.


While some literature on this subject calls for establishing a Return on Investment (ROI) formula, others suggest a 3:1 ratio where for every dollar you spend, you earn three. Extrapolating this, if your Fund Development Officer earns $100,000 including benefits, they would need to find $300,000 in new donations. If 10% of that went to administration of the new program, that would still leave you $180,000 towards the boots on the ground delivery of the new initiative. This means you have netted 60%. How do I come up with this figure? I took the $100,000 fund development cost right off the top leaving $200,000, then took $20,000 (10%) for administration of the initiative to be funded with the new money. $180,000 being 60% of the $300,000 acquired. 


So, what would 4:1 look like? ($400,000 - 100,000 - 30,000 ‎ = $270,000.00) which provides 67% or 2/3. 


Some of you might look at this differently, and that is fine; in fact, I welcome hearing from you on how you would see this.


In closing, if your are considering a Fund Development position, you must set the objectives and ensure they are being met, otherwise, you have just added to your Administration costs.

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