We have done a study recently on the impact of fundraising on our institution. This was done by asking the question, "How much would a department have to raise to add $10,000 net profit to their bottom line?"
Here are the calculations:
What is your hospital’s (or other department, college, institute) margin? Our operating margin has been 1.7%. Using 1.7%, that means that a $10,000 gift to the foundation is equivalent to the Hospital having to bill out $588,235.29 ($10,000 / .017) to achieve the $10,000 net profit.
However, there’s another twist to this equation. We don’t collect 100% on our billings. Actually, the number is more like $.41 for every $1. Therefore to realize the actual $588,235.29, we would really need to bill out $1,434,720.23 ($588,235.29/.41)!
Therefore, that $10,000 gift is equivalent to having to bill out in excess of 1.4 million dollars. What an impactful fact for the donor and the Foundation. Use this rationale all the time in solicitations.
Take away - EVERY dollar given has a huge impact on the beneficiary institution.
Here are the calculations:
What is your hospital’s (or other department, college, institute) margin? Our operating margin has been 1.7%. Using 1.7%, that means that a $10,000 gift to the foundation is equivalent to the Hospital having to bill out $588,235.29 ($10,000 / .017) to achieve the $10,000 net profit.
However, there’s another twist to this equation. We don’t collect 100% on our billings. Actually, the number is more like $.41 for every $1. Therefore to realize the actual $588,235.29, we would really need to bill out $1,434,720.23 ($588,235.29/.41)!
Therefore, that $10,000 gift is equivalent to having to bill out in excess of 1.4 million dollars. What an impactful fact for the donor and the Foundation. Use this rationale all the time in solicitations.
Take away - EVERY dollar given has a huge impact on the beneficiary institution.
