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Fundratios is the charity fundraising benchmarking project which we operate in conjunction with the Institute of Fundraising.

Fundratios 2012 - Overview of Results

1.   Introduction and Overview

Fundratios is designed to help all charities, both large and small, to fundraise more effectively by producing a comprehensive analysis of all aspects of fundraising. This document summarises the key findings of the most recent project.

Twenty charities with a total income of £0.86 billion participated in the study. 65% of those taking part had financial year-ends of March 2012, 20% provided data for the 12 months to December 2011 and the remainder had June or September year-ends.

Of the £0.86 billion, £0.41 billion (48%) was derived from voluntary income; fees for services and grants provided 35% of total income. Trading income net of costs provided 4.2% of total income.

Despite the lack of growth in the economy and the squeeze on personal incomes the Fundratios group achieved growth in voluntary income of just over 5%, helped by a 6% increase in legacy income.

Return on investment was practically unchanged from the previous year at £4.14 per £1 invested. Excluding legacies the median return on active fundraising was also unchanged at £3.03 per £1 invested.

2.   Sources of Voluntary Income

Main Sources of Voluntary Income

Chart 1 shows a simplified analysis of the main sources of voluntary income. For charities in the latest Fundratios report, Legacies provided 33% of total voluntary income. The remaining 67% was actively fundraised and grew by 4.9%.

Of the actively fundraised sources, committed giving including membership is the largest sector accounting for 16.4% of total voluntary income or almost 25% of actively fundraised income. It continued to receive significantly higher investment (+14%) in 2011/12 but the growth rate slowed from 2010/11.

Direct marketing and special events both generated 9% of total voluntary income or 13% of actively raised funds, although income was down slightly in both categories. Local fundraising generated 7.7% of total income and enjoyed good growth in 2011/12.

3.   Revenue Growth

Thirteen of the 20 charities increased their revenue in 2011/12 and six of these achieved growth rates in excess of 10%. Seven of the 20 charities saw a drop in voluntary income but for most, the falls were modest (no greater than 3%).

The weighted average growth in total voluntary income for the 20 charities was 5.3%. Legacy income; grew at a slightly faster rate of 5.9%, actively fundraised income was 4.9% higher.

Growth in Legacy Income and Active Fundraising

The average growth rate of 5.3% for the Fundratios group was slightly better than the charity sector as a whole. Latest figures from the Charity Commission showed aggregate income for 162,000 charities of £58.48 billion, which was 4.7% higher than £55.87 billion a year earlier. Chart 3 shows the growth in voluntary income over the previous year for the Fundratios group; the size of each “bubble” is relative to the sums raised.

Annual Growth in Voluntary Income

4.   Fundraising Expenditure

Fourteen of the 20 charities (70%) increased their fundraising expenditure during the year. Chart 4 compares the growth in expenditure and income over the latest year for the 20 charities although one high growth charity is off the scale. Of course, for several types of fundraising, expenditure in one year may not generate income in the same year. However, of the 14 charities that increased their income in the latest year, 65% did so as a result of increased investment.

Fundraising Expenditure

The charities in the study increased their expenditure by 5.5% and generated a 5.3% increase in voluntary income. As a result there was practically no change in the overall average cost effectiveness.

Extra investment was directed to local fundraising, committed giving, direct marketing, legacy marketing and major donors.

Chart 5 shows the increase in expenditure in each category. The size of the bubble indicates the relative share of the total fundraising budget for each category.

Annual Growth in Expenditure


5.   Return on Investment

Fundratios reports over a number of years have shown the steady decline in return on fundraising investment; a downtrend that goes back to the late 1990s when the overall return averaged more than £5 per £1 of investment. Charities clearly have to work harder than in the past to raise the funds they need.

In the latest year total expenditure for all 20 charities grew by 5.5%, which was almost matched by the 5.3% growth in income. Taking the median of the 20 individual results showed a return on investment of £4.14 per £1 of investment compared to £4.15 in the previous year for the same group of charities.

The overall return on investment is affected by the level of legacy income in a particular year. In 2011/12 legacy income grew by 5.9%, which was broadly similar to the growth in total voluntary income. As a result the return on investment excluding legacies of £3.03 per £1 invested was little changed from the previous year.

The dilemma that charities face is that investment to increase income will often produce a lower return on investment at least in the short term.

As we saw on Chart 5 the programmes that benefitted from the largest increase in budgets were Local Fundraising, Major Donors, Committed Giving and Direct Marketing. With the exception of Local Fundraising, each of those categories produced a lower return on investment than the previous year.

The returns on the main fundraising activities (excluding legacies) are shown below. The average return for legacies was £33.55 per £1 invested (down from £35.30 in the previous year).

Voluntary Income per £1 invested

6.   Highlights by Activity


Corporate donations, sponsorship and payroll giving together provided 5.0% of voluntary income.

Corporate income improved by 16% despite a 6% fall in expenditure. The reverse was true in the previous year when expenditure increased whilst income fell. Chart 7 does suggest that there is a 1 year time lag between changes in investment and the impact on income. The median income per £1 invested in 2012 was £4.84.

Growth in Corporate Income and Expenditure

There was a modest 1.4% increase in income from corporate sponsorship, promotions and licensing.

Income from payroll giving was largely unchanged although there was a 0.5% increase in the number of donors.


Total income from trusts increased by 13%. The median return was £8.63 per £1 invested. Average grant size was £3,534 (1% higher than the previous year). Seven of this year's charities reported that they received National Lottery funding.

Major Donor Programmes

On a weighted average basis, major donor income fell by 1.6% in the latest year. Eighteen charities reported income for this category over the last two years and 10 of the 18 showed positive growth. The average gift increased by 5% to £4,300. Expenditure was 15% higher and the overall return fell from £3.54 to £2.55 per £1 of expenditure which represented a useful improvement from £2.59 in the prior year.


Once again, legacies provided the largest single source of income, averaging 33% of the voluntary income.

Income was up 5.9% over one year but down 0.7% over three years.

There was a modest 2% increase in the average Residuary legacy helped by improving stock market values. However the average Residuary legacy was still 10% lower than in the year before the beginning of the 2008 recession.

The median pecuniary legacy for all charities was £4,000 compared to £3,900 in the previous year for the same group of charities.

Gaming, Lotteries and Competitions

Income from lotteries and competitions has shown no growth in recent years. For the 4th year running, income was down albeit by a modest 1% in 2012; cumulatively over the last 4 years competition income has fallen by almost 10%.

Income per £1 invested improved slightly from £1.80 to £1.87.

Special Events

Income from special events had been growing strongly with a cumulative 76% increase in the 3 years 2008-2011 but 2012 was less successful with total income falling by 1%. Income from local fundraising increased strongly so it may be that some events income was treated as local fundraising. The median return on investment fell from £1.92 to £1.78 per £1 invested.

Mass participation events remained popular amongst fundraisers and provided 66% of events income. The average gross profit margin of 75% was similar to the 76% achieved last year. Activity events produced 20% of income; with a median gross profit margin of 66%.

Direct Marketing Appeals

Direct marketing has produced very little growth over the last 4 years. Income in 2012 was only 2% higher than in 2008.

Expenditure was 9% higher in 2012 and as a result there was a significant fall in return on investment from £1.92 to £1.70 per £1 spent.

Warm direct mail provided 75% of direct marketing income with cold direct mail generating 8% of income. Other media continued to grow in importance and this produced 17% of income.

Warm direct mail achieved a slightly lower response rate of 9.5% compared to 9.7% in the previous year but income per £1 invested improved from £4.67 to £4.94. The response rate for cold mailing was better in 2012 at 1% but return on investment of £0.44 per £1 invested was unchanged from 2011.

Other media were used by 7 of the charities and achieved a lower return of £1.66 per £1 spent but 2011’s result of £2.08 was exceptional and the latest figure matched the 2010 result.

Committed Giving and Membership

Committed giving and membership provided 16% of total voluntary income or excluding legacies, 25% of active fundraising income. In 2011/12 total aggregate expenditure increased by 14.3% whilst income rose by 8.8%. The median return declined from £3.94 to £3.60.

The average first year income per new giver increased from £38 to £43. Acquisition costs also improved by 8% from £105 per new giver to £97. Together these changes meant a better balance between cost and first year income.

The data on upgrades from existing committed givers showed that 28% of existing donors were approached to increase their donation and 32% of those approached did agree an increase. The average increase was £34 a year (just under £3 a month).

House-to-House Collections

Only three of the 20 charities reported income for House to House collections. In total income was 20% lower than the previous year and expenditure was 9% lower.

Local Fundraising

Income from local fundraising was strong in 2011/12. Fifteen charities reported income in this category and only three saw income fall; the average weighted growth was 12%. The median return on investment improved from £1.67 to £1.87 per £ invested.

Donations and Gift Aid

Donations received, which could not be directly attributed to other fundraising activities such as membership or shops, amounted to 1.1% of voluntary income (1.0% last year).

This year, committed giving was 67% gift aided. Direct marketing was 58% gift aided.

Tax recoveries from all sources provided 4.19% of voluntary income.

Mail Order Trading

Charities have found it difficult to increase income from mail order in recent years; average growth had been negative in each of the three previous years. Some charities faced further declines in 2012 but the median change was +2.7%. Return on investment improved from £1.21 per £1 of expenditure to £1.43.

 © CIFC Ltd 2013


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