Fundraising efficiency ratio: Formula, benchmarks, & how to improve it

Your quarterly nonprofit board meeting is underway when someone asks, “How efficiently are we fundraising?” If you don’t have a clear answer, your fundraising efficiency ratio can help. It shows how much your nonprofit spends to raise each dollar: total fundraising expenses ÷ total fundraising revenue.

While $0.20 or less can indicate strong efficiency for a mature fundraising program, a good result depends on the campaign, its goals, and its long-term value.

Use the calculator in this guide to find your ratio, interpret your results, and explore five practical ways to improve your fundraising efficiency.

Key takeaways

• Calculate your ratio 🧮 Divide total fundraising expenses by total fundraising revenue. A lower result means you spent less to raise each dollar.
• Put benchmarks in context 🎯 A lower ratio generally indicates greater short-term efficiency, but the right result depends on your channel, campaign stage, goals, and long-term donor value.
• Grow recurring revenue 🔁 Retaining existing donors generally costs less than acquiring new ones, so recurring giving can improve long-term efficiency.
• Compare campaigns thoughtfully 📊 Review similar campaigns over time alongside net revenue, donor retention, and long-term donor value.
• Reduce avoidable fees 💸 Platform and processing fees add to fundraising expenses. With optional tips enabled, nonprofits pay neither on Givebutter.

What is the fundraising efficiency ratio?

A fundraising efficiency ratio—also called a fundraising expense ratio or cost per dollar raised—shows how much your nonprofit spends to generate each dollar of fundraising revenue. A lower result means you’re spending less to raise each dollar.

Fundraising efficiency ratio = Total fundraising expenses ÷ total fundraising revenue

A ratio of $0.20, for example, means your nonprofit spent 20 cents to raise $1.

💡 Keep in mind: Some organizations invert the formula and calculate revenue ÷ expenses. This guide and calculator use expenses ÷ revenue, where lower is better.

What counts as a fundraising expense? 💰

Fundraising costs can add up in more places than you might expect. When calculating your ratio, remember to include:

• Marketing and advertising
• Staff time
• Event supplies and vendor costs
• Printing and postage
• Fundraising software, platform, and processing fees

Keep the math apples to apples: If you’re reviewing one campaign, only count the expenses and revenue tied to that campaign. For an annual ratio, use your annual totals.

💡 Pro tip: With Givebutter, you won’t have to worry about factoring platform or processing fees into your fundraising efficiency ratio. Core fundraising tools are free to use with optional donor tips enabled.

More to explore

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How to calculate your fundraising efficiency ratio

Calculating your fundraising efficiency ratio is simple. Enter your total fundraising expenses and revenue into the Givebutter calculator below.

🎬 See it in action: If your fundraising expenses are $25K and you raised $165K, your cost per dollar raised is $0.15 ($25K ÷ $165K = $0.15).

What is a good fundraising efficiency ratio?

A cost to raise a dollar of $0.20 or less can indicate strong efficiency for a mature fundraising program, but there is no universal “good” benchmark. Results vary by campaign type, audience, organization size, and whether a campaign is focused on retention or acquiring new donors.

The BBB Wise Giving Alliance recommends spending no more than 35% of related contributions on fundraising, or $0.35 per dollar raised. This annual accountability standard applies across an organization’s full year, not to every individual campaign.

Don’t worry if your efficiency ratio isn’t as low as you’d like. Track it at the end of each campaign and review it again at the end of each quarter. This way, you can work toward improvement over time, using your own data as a benchmark.

🎬 See it in action: If your total fundraising costs were $50K and you raised $100K, your fundraising efficiency ratio would be $0.50 ($50K ÷ $100K = $0.50).

At $0.50, this campaign deserves a closer look before you repeat it—but don’t judge it by this number alone. Consider its net revenue, new donors, recurring gifts, and long-term value, too.

Why benchmarks vary by channel 📡

Benchmarks aren’t one-size-fits-all. Efficiency varies depending on the channel, campaign type, and whether you’re reaching new or existing donors. Digital campaigns and recurring giving programs, for example, can have lower ongoing costs once you’ve built the donor relationship.

The M+R Benchmarks 2026 study shows just how wide the gap can be. In 2025, direct mail to active donors generated an average of $4.51 per $1 spent, while mailings to prospective donors generated $0.41 per $1 spent. That translates to spending about $0.22 to raise $1 from active donors versus $2.44 from prospective donors.

This means fundraising efficiency isn’t always the same thing as fundraising effectiveness. Your donor acquisition program may seem inefficient at first, but if it brings in supporters who continue to give, its long-term value may justify the upfront cost.

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Set your nonprofit up for success with an annual fundraising plan →

5 ways to improve your fundraising efficiency ratio

When you’re looking to improve your fundraising efficiency ratio, it might be tempting to cut down on spending altogether. There’s a common myth that too much overhead spending means a nonprofit is ineffective. But nonprofits need the right people, tools, and infrastructure to grow. Without that investment, your nonprofit may become less sustainable over time.

Instead, focus on both sides of the formula: reducing unnecessary expenses and increasing revenue.

1. Switch to a fee-free fundraising platform 💸

Platform and processing fees add to your fundraising expenses. With optional donor tips enabled, you pay $0 in platform and processing fees on Givebutter. Switching from a paid platform can improve your fundraising efficiency ratio without cutting the resources that move your mission forward.

🎬 See it in action: If a nonprofit raises $100K and pays a 4% platform fee, that adds $4K to its fundraising expenses—and $0.04 to its cost per dollar raised. With optional tips enabled on Givebutter, nonprofits pay $0 in platform and processing fees, so neither cost is added to the ratio.

Dive deeper

See how the Givebutter Guarantee lets you keep 100% of funds raised →

2. Build a recurring giving program 🔁

According to M+R Benchmarks 2026, 71% of monthly donors were still giving one year after signing up. Make it easy for supporters to give consistently by enabling recurring donations on your fundraising page.

Recurring giving can improve your long-term efficiency while making revenue more predictable, allowing you to plan how to reinvest it over time.

More to explore

Learn how to attract & keep recurring donors →

3. Invest in donor retention 🤝

Because retaining existing donors generally costs less than acquiring new ones, investing in your donor retention strategy can have a big impact on long-term efficiency. In 2025, 66% of prior online donors gave again, compared with 24% of new online donors, according to M+R Benchmarks 2026.

Keep supporters giving beyond their first donation by sending prompt, personalized thank-you notes, publishing quarterly impact reports, and investing in donor appreciation strategies such as social media shoutouts and donor-only updates.

Dive deeper

Discover donor retention strategies that actually work →

4. Analyze each channel & adjust your strategy 📊

Some fundraising campaigns are more efficient than others, and the best fundraising campaign type for one nonprofit might be different from another’s.

Use the calculator above to determine your fundraising efficiency ratio by campaign type, such as direct mail or an annual gala. Rather than cutting anything above $0.35, compare similar campaigns over time and consider net revenue, new donors, retention, and long-term value. Reduce investment in campaigns that repeatedly underperform, and build on the ones that create sustainable value.

Dive deeper

Uncover the most important fundraising performance metrics to track →

5. Use your CRM to target smarter, not wider 🎯

Mass outreach can be expensive. Instead of casting a wide net, focus your efforts where they’re most likely to have an impact.

With Givebutter’s donor management software, you can segment supporters by giving history and past engagement. The DonorSearch Wealth Screening integration adds giving-capacity insights, helping you create tailored messages that are more likely to resonate.

Learn more

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Improve your fundraising efficiency with Givebutter

Your fundraising efficiency ratio offers one view of how well your strategy and operations are working. Improving it doesn’t mean cutting your spending altogether. Small changes like investing in retention, building on high-performing campaigns, and choosing free or low-cost fundraising tools can lower expenses without shortchanging your mission.

With Givebutter, your fundraising, event management, and CRM tools work together in one place. When optional donor tips are enabled, you pay $0 in platform and processing fees. If donors don’t cover processing costs, Givebutter will—helping lower your fundraising expenses while keeping every dollar raised working toward your mission.

Sign up for your free Givebutter account and make every fundraising dollar count.

FAQs about the fundraising efficiency ratio

What is the 30/70 fundraising efficiency ratio?

A 30/70 fundraising efficiency ratio means an organization spends $0.30 on fundraising for every $1 raised, leaving $0.70 before program and administrative expenses. Whether that’s a healthy result depends on the campaign type, its goals, and its long-term value. To lower the ratio, the nonprofit would need to reduce expenses, increase revenue, or both.

How does Givebutter lower my fundraising efficiency ratio?

Givebutter can improve your fundraising efficiency by removing platform costs from your expenses when optional donor tips are enabled.

How often should nonprofits calculate their fundraising efficiency ratio?

Review your fundraising efficiency ratio at the end of each major campaign and again each quarter. Calculate an organization-wide ratio annually once your expenses and revenue are finalized.

Givebutter’s campaign and appeal reporting can help you track the revenue connected to each fundraising effort. Remember to include outside expenses such as staff time, advertising, and vendor costs when calculating the complete ratio.

How do I explain my fundraising efficiency ratio to my board?

When presenting to your board, frame fundraising efficiency in terms of your cost per dollar raised. For example, you can say, “For every $1 we raised, we spent $0.15.”

Share how the ratio has changed over time, and explain that results vary by campaign type and channel. Pair it with net revenue, donor retention, and long-term value to give your board the full picture.