The Debate Over Fundraising Costs

Russ Reid's "Heart of the Donor" study shows that donors don't mind a nonprofit spending more on fundraising and management if it allows the organization to raise more money and have more impact. Author Dan Pallotta gives the hypothetical example of a cancer organization seeking a new chief medical officer. Candidate A has a cure for cancer but costs $1 million. Candidate B only costs $200,000 but doesn't have a cure for cancer. The watchdogs would want the organization to hire the less expensive candidate, while those who actually want to fulfill the organization's mission would clamor to hire the person who can cure cancer!