Spend $1, Earn $3

Don’t be afraid to spend money on your fundraising initiatives. Investing in your development team’s efforts pays off, big time.

In fact, the average U.S. hospital earns more than $3 for every $1 spent on fundraising, a trend that’s held even during the depths of our recent recession.

But remember, $3 is the median; half of hospitals earn less while half earn more. Your institution’s return on investment (ROI) depends on many factors—some of them you can control like:

• Personnel. How good is your development team? How deep are your donor relationships? Did you have any turnover last year?
• Message. Does what you have to say, and how you say it, tug on your donors’ heartstrings? Why should they support you rather than some other cause?
• Place & Time. Phone calls, videos, emails, letters, visits, and events … are you talking to your donors when and how they prefer?

Some things, though, you can’t control, like what type of hospital you’re working for.  There are some types of facilities (like community hospitals) that just raise less money than others (like academic hospitals). Keep an eye on the average ROI for your type of institution before you compare your success to those of others.

Some of the trends we see by institution type, however, may be attributed to the size of the institution. Those with small development budgets (which we assume are smaller institutions) earn approximately 30 percent less per dollar spent than those hospitals with the largest budgets.

The bottom line? When it comes to fundraising, you need to spend money to earn money. Wise investment in the right people, the right message, and the right materials is sure to pay off for you, your hospital, and its patients, too.