What are Fundraising Expenses?

Fundraising expenses is a classification of expenses used by a nonprofit entity. Expenses included in this classification are fundraising mailings, fundraising functions, and an allocation of the compensation of those employees engaged in these activities. The proportion of fundraising expenses to total expenses is frequently reviewed by contributors to determine the extent to which their contributions will go toward more fundraising, rather than the targeted goals of the entity.

Types of Fundraising Expenses

Here is a listing of the more common fundraising expenses for a nonprofit entity:

Event costs. Expenses for organizing fundraising events, such as venue rentals, catering, and equipment rentals. These costs are essential for hosting successful events that attract donors and raise funds effectively.
Marketing and promotion. Costs for designing and distributing flyers, social media ads, and email campaigns to publicize fundraising activities. Effective marketing helps increase visibility and reach a broader audience of potential donors.
Donor management software. Expenses for purchasing or subscribing to software that manages donor information, tracks donations, and automates follow-up communications. This investment helps streamline fundraising efforts and maintain strong donor relationships.
Printing and postage. Costs associated with printing donation forms, newsletters, and direct mail appeals, as well as mailing them to potential donors. These traditional methods can still be effective in reaching certain donor demographics.
Online donation fees. Transaction fees charged by payment processors for handling online donations through credit cards or payment platforms. Budgeting for these fees ensures that net donations are accurately tracked.
Staff salaries. Compensation for development officers, grant writers, and other staff directly involved in fundraising activities. Investing in skilled fundraising personnel can significantly enhance a nonprofit's ability to secure funding.
Consultant fees. Costs for hiring external fundraising consultants or agencies to develop strategies, conduct feasibility studies, or manage campaigns. Consultants bring expertise and can improve the effectiveness of fundraising efforts.
Incentives and merchandise. Expenses for promotional items like T-shirts, mugs, or other incentives offered to donors as a token of appreciation. Offering small gifts can enhance donor engagement and encourage contributions.
Training and development. Costs for training fundraising staff in areas like grant writing, donor relations, or digital marketing. Enhanced skills can lead to more effective fundraising strategies and improved results.
Technology and equipment. Expenses for acquiring or upgrading computers, video conferencing tools, or software to facilitate virtual fundraising events. Investing in technology can expand reach and improve donor experiences during online campaigns.

Presentation of Fundraising Expenses

Fundraising expenses are aggregated into a single line item in the statement of activities, where users can easily access it. The exact position is noted in the following sample statement of activities.