2 Accounting Issues You Need to Understand

• Take a prospect to lunch this week without coming home with a check? You look like a failure. Get a donation from that donor a week later (without spending an additional dime)? You look like a genius. Neither is a helpful evaluation.
• Spend $1 million on a prospecting effort (mail or phone) that raises $850,000 (acquiring 25,000 new donors) and the media will accuse you of fraud (“All the money went to fundraising costs!”). Cultivate those 25,000 new donors for the next five years at a cost of $900,000 to generate $3.3 million and you’ll win an award.

The point is, a nonprofit must not allow itself to get sucked in to evaluating fundraising results on a campaign-by-campaign, short-term basis.