kustannusvarainhankintasuhde

Kustannusvarainhankintasuhde, often translated as cost-to-raise-funds ratio or development expense ratio, is a financial metric used in the nonprofit sector to evaluate the efficiency of fundraising efforts. It measures the amount of money spent on fundraising activities in relation to the total amount of funds raised.

The formula for calculating the kustannusvarainhankintasuhde is: (Total Fundraising Expenses / Total Contributions Received) * 100. For example, if a nonprofit spent $10,000 on fundraising and raised $100,000, its kustannusvarainhankintasuhde would be 10%. This means that 10 cents were spent for every dollar raised.

A lower kustannusvarainhankintasuhde generally indicates greater fundraising efficiency. However, the ideal ratio can vary significantly depending on the type of nonprofit, its size, and its fundraising strategies. For instance, organizations relying on large, major gifts might have a lower ratio than those engaging in extensive direct mail campaigns.

Donors and watchdog organizations often use this ratio to assess how effectively a charity is utilizing its resources. While a low ratio is desirable, it's important to consider it alongside other financial indicators and the organization's mission and program impact. An excessively low ratio might, in some cases, suggest underinvestment in essential fundraising infrastructure or marketing, potentially hindering future growth. Therefore, a balanced approach is crucial when evaluating this metric.