Random Thoughts on Life and Work

April 14, 2008

ROI – Does it exist?

Filed under: Non-Profit — Darren Mullenix @ 11:38 am
Tags: , , , , , , ,

Business people are used to talking about Return on Investment.  And many times we try to apply some measurement of ROI in the non-profit world as well.  I would contend that within the development arena, ROI is particularly challenging to measure.  Some efforts produce an easy to measure statistic.  Others – not so much.

Take direct mail for instance.  95% of ROI can be measured easily.  Costs spent on the mailing vs donations returned.  The other 5 % might be goodwill, name recognition, or just plain informing.  Of course, if done badly, this 5% might be negative and actually hurt the organization. 

What about donor events?  Vastly expensive in both direct expenditures and staff impact.  Especially if the organization makes every attempt to run lean.  But how do you measure ROI?  Do you absorb the costs knowing that your donors have been impacted (hopefully positively) by the event?  Is the information that you have shared with them enough?  Does the fact that this group of donors has received a special invitation to a special event serve as enough motivation to keep their engagement with the organization?

Now I realize that donor events come in all flavors of size and purpose.  But I just want to throw out some thinking surrounding this development activity. 

I would contend that maybe ROI for donor events is not truly measurable.  But the events themselves can be powerful connectors for donors.  So in that sense, they shouldn’t be ignored entirely.

Just a thought.

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