What it is: Return on investment (ROI) measures the gain or loss generated on an investment relative to the amount of money invested. ROI is usually expressed as a percentage and is typically used for personal financial decisions, to compare a company's profitability or to compare the efficiency of different investments.
The return on investment formula is: ROI = (Net Profit / Cost of Investment) x 100
I have been working for a client for approximately 19 months. Work that I have done for them includes creation of a fund development plan, development of a fundraising package and providing fundraising training for the executive director, Board of Directors and staff.
They have experienced an 805% ROI this year. In other words, their cost for my work resulted in revenue of more than 8 times. Since I began working for this client, their revenues through sponsorships and donations have increased 1400%!
Many times organizations approach me thinking that new financial resources will magically appear overnight. It takes some time, usually a year or more. Additionally, like the client I’ve highlighted in this blog, the entire organization must be involved in fundraising. They have a fundraising mindset that permeates the entire organization. The executive director, Board of Directors and all of the organization’s staff understand that they have an important role in fund generation for their organization.