Study: Large Scale CFC Campaigns Have Lower Fundraising Cost

A Where Most Needed exclusive: across all 300 local campaigns of the Combined Federal Campaign in 2005, average costs were significantly higher for small scale campaigns, although there were at least few low cost performers in all scale categories. 

I had a rare chance to do some original analysis using the 2005 campaign results of the Combined Federal Campaign, the workplace giving program of the US Federal government, administered by the Office of Personnel Management.

There were about 300 local campaigns across the US in 2005 ranging from the $58 million CFC of the National Capital Area to a $440 campaign in Jefferson County, Indiana.  Since the campaigns run along similar lines and collect data in similar ways, they provide an opportunity to test the effect that the scale of operation had on fundraising costs.

The complete results are in this PDF file (88 Kb), but here is a summary:

Total Collected Range	Average cost of campaign
Over $10,000,000	9.4% (7.7%)*
$1,000,000 to $9,999,999	9.4%
$100,000 to $999,999	13.1%
$10,000 to $99,999	16.5%
$1,000 to $9,999	20.5%
$100 to $999	0.0%
Grand Total	13.4%

* Only two campaigns were in this category.  The CFC of the National Capital Area collected $57.6 million with a cost of 7.7%.  The Overseas CFC, which is different from a typical local CFC, raised $16.0 million with a cost of 11.2%.

And futher analysis confirms that these are not flukes.  For instance, three out of five campaigns over $1 million had campaign costs under 10%, but only one in four of campaigns from $100,000 to $1 million.  No campaign over $1 million had costs over 20%, but one in five of the campaigns between $10,000 and $100,000 did. 

But another interesting aspect of this study is that there are at least a few low cost (under 10%) performers in every size category.  Over 30 local organizations beat the CFC of the National Capital Area in fundraising cost despite its being at least 10 times larger.  So individual fundraising organizations can do substantially better than average for organizations of comparable size.  It's just that it is unrealistic to expect that more than a handful of them will do so. 
 

Comments

[Woods Bowman]

This should be a very efficient way to raise money. After all, there is a captive audience. All a donor has to do is to look in a directory that lists all of the charities that are authorized to receive gifts through the campaign to make sure their favorite organization is listed. There is zero prospecting and very little donor education involved. Yet, the smallest campaigns come close to the standard that CFCs use to screen prospective particpating charities:, namely administrative and fundraising costs should be no more than one-fourth of revenues.