Nonprofit organizations, as a rule, are very frugal. Generally, they have to be. Every dollar counts. The focus is on providing as much service as possible.
So, when they shop for services, the first question they ask is often, “How much does it cost?”
It’s at this point that they often unwittingly make a fatal mistake. They equate cost with price.
Cost and price are NOT the same thing.
Price is easy. It answers the question, “how much money must I have to purchase this?”
Cost is more complicated. A lot more real. It’s what your nonprofit SHOULD be focused on.
Cost is “what did I have to give up?” not “what did I pay”? Opportunity cost, for example. If you deploy your resources to raise money a certain way then, you can’t use them another way. If the second method is more productive—that is, raising more money per unit price—then the first method is by definition the more costly, even if the PRICE was less.
Event fundraising is a good example. If a development officer spends six weeks planning and executing an event that raises $10K but could have spent three afternoons calling on individual donors raising $50K, you see the lost opportunity. And that doesn’t even include the direct costs of the event which make the $10K look more like $5K or LESS.
In the same way, nonprofits hire mediocre consultants, clunky donor management software and inferior tools, and decide to combine a solicitation mailing with a newsletter all in the name of price. What they’re doing, however, is COSTING them so much more in lost gifts and gifting opportunities.
Principle 8 of The Eight Principles™ is Invest, Integrate, and Evaluate. Invest in the finest tools possible, integrate all your efforts and continually evaluate them. By thoughtfully going for a higher price service your costs will often go down. WAY down. It’s spending $10K instead of $5K to raise $50K instead of $15K.
At The Eight Principles™, we show you how to invest wisely in your fundraising program to achieve the highest possible return. Start HERE to learn how.
Remember, it’s not what you SPEND, it’s what you GET in return that powers your cause.