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Can We Talk About Net Income?
Greetings!
Five months from now the RWRFC team will start collecting gross revenue and participation data from many of your organizations for our annual ranking of the top 30 programs.
You'll note that I said "gross" revenue, the top line figure reflecting donations, registration fees and sponsorship. What, I'm often asked by reporters, about the net revenue, the critical dollars needed to fund an organization's good work? The truth is that large organizations with numerous events are challenged to obtain even relatively simple to account for gross revenue figures on a timely basis. Based on the difficulty we have in obtaining gross revenue figures, I'm sure that many groups would refuse to share their net revenue numbers. Even if we obtained the figures, making apple to apple net revenue comparisons between groups with different cost accounting systems is a bear of a task. A few years ago, Charity Navigator released a special events fundraising efficiency study based on IRS Form 990 figures -- and it was a disaster. (Click here to learn how flawed methodology doomed this study.)
In spite of the fact that it's tough to compare net revenue results, I think it's crucial that our industry start speaking more openly about bottom line results. What constitutes good performance for different types of events at different points in their life cycle (e.g. new vs. mature programs, proprietary mass participation walks vs. endurance programs that piggyback off existing marathons)?
It's certainly a topic worth discussing at the 5th Annual Run Walk Ride Fundraising conference which will take place in Atlanta on February 22 & 23, 2011. Save the date!
President
Run Walk Ride Fundraising Council
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I received a phone call the other day from a thon fundraising professional whose boss wanted to know: Is our percentage of in-kind vs. cash donations appropriate?
