University spends less to raise more dollars

The University’s fundraising chief said this week that GW spends 21 cents for each dollar raised – an efficiency indicator that has dropped as GW intensifies fundraising efforts.

While the University has hired more staff, hosted more events and paid for more marketing, the amount of money coming back in has paid off the investments at a better rate.

Mike Morsberger, vice president of development and alumni relations, said the cost-per-dollar of fundraising has dropped five cents since he was hired in 2007.

For the past five years, GW’s fundraising has been on the rise – part of University President Steven Knapp’s push to wean GW off tuition dependence. Over the same period, the development office tripled its staff, now counting about 200 staff members.

Last fiscal year, the University raked in a record-breaking $120 million, surpassing its goal for the fifth-straight year.

The University’s double-digit development growth in recent years, even during the recession, far outpaced other colleges nationwide that saw development slowdowns.

Fundraising costs could rise by a few cents this year as the University prepares to launch a comprehensive fundraising campaign within the next two years, Morsberger said.

GW spent more than $24 million on fundraising last year – $1.5 million more than the year before – according to public tax records filed in 2011. The biggest cost for his office is salaries, he said, followed by large fundraisers and promotional material.

The University counts employee salaries and compensation, office infrastructure and expenses for events, marketing and outreach when calculating expense totals. The figure excludes the salaries of deans, who spend 40 to 50 percent of their time fundraising for their schools.

New York and Tulane universities spend 10 cents and 17 cents per dollar, respectively – less than GW.

NYU’s cost includes all salaries of fundraising employees, marketing and outreach and office management, Philip Lentz, NYU’s director of public affairs, said. It also excludes dean salaries, though they fundraise there as well.

Holly Hall, an editor at the Chronicle of Philanthropy, said as institutions formalize and streamline their fundraising campaigns, their costs tend to go down. She said she considers more than 35 cents per dollar as a high cost for fundraising.

She said the cost of fundraising is directly related to an institution’s type of fundraising. An institution that relies on direct mail will have a higher cost than one that is using a campaign to drum up donations.

“An institution building its fundraising infrastructure or preparing to launch a campaign, for example, may need to spend significantly more per dollar than one with mature fundraising operations,” she said.

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