Fundraising results are often discussed in terms of total dollars raised, but that number alone can be misleading. If you do not factor in fees, staff time, and other hidden costs, you may be overestimating your real return. Understanding the true cost of fundraising helps you choose better tools, use your resources wisely, and make the case for smarter investments.

Why You Need to Look Beyond Gross Revenue

Two platforms can deliver the same gross amount but leave you with very different net results. A campaign that raises $50,000 with high fees and heavy labor costs could be less valuable than one that raises $45,000 with leaner expenses. Measuring ROI means asking, “What did it cost us to raise each dollar?”

When you account for the full cost of processing donations and managing campaigns, you will have a much clearer view of which strategies are truly worth continuing.

Breaking Down the Real Costs

Your cost of fundraising comes from three main areas: processing fees, labor costs, and platform or software costs. Let’s break each one down.

1) Processing Fees

Processing fees are the percentage and fixed amounts deducted from each donation before funds hit your account. These usually include the payment processor’s fee and, if applicable, the platform’s own fee. For example, with Solafund the total is 4.4 percent of the donation (2.9 percent plus 30 cents to Stripe, plus a 1.5 percent platform fee). You can see the exact breakdown in our Solafund fee breakdown to understand where each penny goes.

Other platforms often charge higher platform fees or add tiers of features that increase your costs without necessarily improving your fundraising results.

2) Labor Costs

Your team’s time is one of your most valuable resources. If staff spend hours setting up complex forms, troubleshooting donor issues, or manually sending receipts, those hours have a real cost. You can assign a dollar value to this by multiplying the number of hours spent on a task by the hourly rate (including benefits) of the staff doing the work.

Sometimes a slightly higher platform fee can be worth it if the software saves your team significant time that could be used for donor cultivation, program delivery, or strategic planning.

3) Platform or Software Costs

Some platforms charge monthly or annual subscription fees in addition to per-transaction fees. Others operate on a “free” model but pass along high processing costs. Understanding donation platform pricing will help you compare apples to apples.

Make sure you know whether your platform locks you into a contract, adds fees for certain payment types, or charges for “premium” features that you may not even use.

How to Calculate ROI on Your Giving Platform

Here’s a straightforward method to measure the real return on your fundraising efforts:

1. Calculate total funds raised: The gross amount collected through your platform.
2. Subtract processing fees: Include both the payment processor’s cut and any platform fees.
3. Subtract labor costs: Multiply hours worked by the hourly rate of each team member involved.
4. Subtract software costs: Monthly or annual platform subscriptions, add-on fees, or special service charges.
5. Divide net revenue by total costs: This gives you your ROI ratio (e.g., an ROI of 3 means you earned $3 for every $1 spent).

The higher your ROI, the more efficient your fundraising. Tracking this over time lets you spot trends and make data-driven decisions.

Hidden Costs to Watch For

Some expenses are easy to miss when calculating the cost of fundraising. Keep an eye out for:

• Chargebacks and refunds: These can eat into net revenue and may carry additional fees.
• Custom development: If your platform requires extra coding to integrate with your systems, that is an added cost.
• Marketing spend: Ads, printing, or event expenses tied to a campaign should be included in ROI calculations.
• Staff burnout: While harder to quantify, overloading your team with manual processes can hurt long-term efficiency.

When Higher Costs Might Be Worth It

While lower fees are generally better, they are not the only factor. If a platform’s features help you raise significantly more money, retain more donors, or save substantial staff time, the higher cost could still yield a better ROI. The key is to track both the revenue and the time savings.

For example, a tool that automates donor receipts and integrates with your CRM could free up dozens of hours per year for stewardship, potentially leading to higher lifetime donor value.

Improving Your ROI Without Changing Platforms

If switching platforms is not an option right now, there are still ways to improve ROI:

• Encourage fee coverage: Many donors are willing to cover transaction costs if given the option.
• Streamline internal processes: Create templates for emails, reports, and campaign pages to save staff time.
• Focus on retention: Retaining donors is more cost-effective than acquiring new ones, so prioritize follow-up and recognition.
• Run targeted campaigns: Use past data to identify your most responsive audiences and focus your outreach there.

Making the Case to Your Board or Leadership

Boards and leadership teams often want to know why a particular platform is worth its cost. Present your ROI data clearly and objectively. Show both the tangible (net revenue, hours saved) and intangible (donor satisfaction, staff morale) benefits. If a switch would improve ROI, provide side-by-side comparisons of fees, features, and projected results.

Why Measuring the True Cost Matters

Without a clear picture of the real cost of fundraising, you could be pouring time and money into channels that deliver lower returns than you think. By tracking every cost—fees, labor, software—you get a true net revenue number that reflects the health of your fundraising operation.

Once you know your ROI, you can focus on the platforms, campaigns, and donor segments that give you the best results, while cutting back on those that do not justify their cost.

Putting It All Together

Measuring the true cost of fundraising is not just about saving money—it is about making strategic decisions that maximize your net revenue and long-term donor relationships. Whether you are assessing your current giving platform or evaluating a new one, factor in every cost and compare it to the value delivered. This approach ensures your fundraising is sustainable, scalable, and aligned with your mission.