Is it worth it for your mission? Find out before you spend.
Is this marketing worth it for your nonprofit?
Marketing is worth it for a nonprofit when the new donors it brings in give more over time than it costs in money and staff time. Enter what you're being asked to spend and a few numbers about your donors to see how many new donors it needs to bring in.
Worked example. Change any number to use yours.
With 43 new donors (the 2-year break-even)
Year 1
−$1,700
Net cost
2 years
+$20
Comes out ahead
A loss in year one is normal for donor growth. Look at the 2-year view: returning donors pay it off.
Needs about 60 new donors in year one, or 43 over 2 years.
I don't know our numbers
Use figures from your donor database or spreadsheet.
Average gift: $0 · Retention: 0 in 10
With 43 new donors (the 2-year break-even)
Year 1
−$1,700
Net cost
2 years
+$20
Comes out ahead
A loss in year one is normal for donor growth. Look at the 2-year view: returning donors pay it off.
At $1,000/month for 6 months, this needs to bring in $6,000 in new giving, about 60 new donors at your average gift. If 4 in 10 give again next year, about 43 new donors would pay it off within 2 years.
Chart assumes you get exactly the break-even number of donors. Enter what they promised to see their version.
- New donors per active month to break even
- 8
- Most you can spend to gain one donor
- $140
How did we get this?
43 donors ÷ 6 active months
How did we get this?
That's what one new donor gives over 2 yrs, after fees. Year one only: $100.
Details
- Break-even, first year: 60 donors ($6,000 ÷ $100 per donor)
- Break-even, 2-year view: 43 donors ($6,000 ÷ $140 per donor)
- Full cost: $6,000 = $0 setup + ($1,000 fee + $0 staff and volunteer time) × 6 months
Make the case to your board
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Is It Worth It? for Nonprofits · Board summary
Board summary: Marketing agency
Inputs: $1,000/month, 6 months, setup $0, staff 0 hrs/month at $0, average gift $100, 4/10 give again, 2-year view.
Questions we asked the vendor: Do you understand donor journeys and recurring giving? Who owns our donor data, website, and ad accounts if we part ways? How will you report new donors? When should we expect results, and what's the plan if they don't come?
Estimates for planning only. Not financial or tax advice.
How to judge a marketing pitch
Sooner or later, someone offers to grow your donor base for a monthly fee. It might be an agency, an SEO consultant, an ad platform, or a friend of a board member. The pitch usually talks about traffic, followers, or reach. Your board wants to know something simpler: will this bring in more for the mission than it costs?
1. Count the whole cost
Add the monthly fee, any setup fee, and the staff time it takes. Staff time is the cost nonprofits forget most. Ten hours a month from your development director is real money, even when no invoice arrives.
2. Turn the cost into donors
Divide the cost by what a new donor gives. That's how many new donors it needs to bring in. If the number seems impossible for your size, that tells you something before you sign anything.
3. Look past year one
Many donors give again. A campaign that loses money in year one can pay off in year two or three. Judging it too early is one of the most common ways good marketing gets cancelled. The calculator shows year one and the long view side by side.
4. Hold them to a donor number
Ask the vendor how many new donors they expect per month, and put it in the calculator. You'll see a verdict and the most their service is worth to you each month. Then check in monthly against that promise.
Guides by topic
Questions to ask any vendor
- Do you understand donor journeys and recurring giving?
- Who owns our donor data, website, and ad accounts if we part ways?
- How will you report new donors, not just traffic or impressions?
- When should we expect results, and what's the plan if they don't come?
How we calculate
- Full cost = setup fee + (monthly fee + staff hours × hourly cost + volunteer hours × hourly value) × months.
- Value of one new donor over N years = (first gift + later gift × (r + r² + ... + r^(N−1))) × gifts per year × (1 − processing fee) − thank-you cost, where r is how many out of 10 give again, divided by 10.
- Monthly donors are valued at monthly gift × 12 for each year they keep giving.
- Break-even new donors = full cost (minus the value of other goals you enter) ÷ value of one new donor, rounded up.
- Cost to raise $1 = full cost ÷ giving over the time frame.
- Most it's worth paying per month = (promised donors × donor value − setup fee) ÷ months − staff time per month.
Questions people ask
How do we know if nonprofit marketing is worth it?
Compare what it costs, including staff time, with what the new donors it brings in will give over a few years. This calculator does that with your own numbers.
Why look beyond the first year?
Many donors give again. A campaign that loses money in year one can pay off in year two or three. Boards often cancel too early without seeing this.
What should a nonprofit spend on marketing?
There's no right percentage for everyone. A better question: what's the most you can spend to gain one donor? The calculator shows that number.
Does this save our numbers?
No. Nothing is saved or sent anywhere. The share link puts your numbers in the web address only.
About the builder
Built by Paul Watley
Paul is the Director of SEO at Tandem Theory in Dallas, Texas. He builds websites and helps them get found through search and digital marketing. He is originally from Nebraska and now lives in Dallas with his wife, their three kids, and Sunny, their dog.
He built this free tool because nonprofits get the same sales pitches businesses do, with less money and less time to check the math. Put in your own numbers and decide for yourself.