Fundraising costs increased modestly in transition: Struggles with SOP-98-2 still evident. (NPT 100).

While it's true that it generally takes spending money to make more money, in the case of NPT 100 organizations, it didn't take that much. To see an 18 percent spike in public support, it only cost an additional 2 percent from the previous year.

For FY '00, the NPT 100 organizations spent $2.03 billion to raise $49 billion, up $275 million from the previous year.

Many organizations were still struggling with accounting rules for joint allocations, the so-called SOP-98-2.

"If you looked at a whole bunch of organizations, say from 1998, before the rule applied, you'd find that there are more of them that took some of their fundraising expenses and charged it as a benefit of their public education it was charged against program expense," explained Barry Gardner, director of consulting, for Capin & Crouse, based in Chicago, an accountant for Larry Jones International Ministries/Feed the Children, in Oklahoma City.

The American Red Cross, where the fundraising costs jumped 16 percent in a year of declining revenues, can also be tacked to bookkeeping, according to Stephen Rieve, senior director, business evaluation and analysis, American Red Cross (ARC) in Washington, D.C.

The ARC changed the classification to the recruitment of volunteers to fundraising cost. The organization also started work on reformulating its fundraising operations at the national and local levels. The local focus was to prepare for less dependence on money from the United Way, he said.

At the U.S. Fund for UNICEF in New York City, expenses increased $10.8 million in FY '00 to $17.5 million, a whopping 160.3 percent increase.

Charles J. Lyons, the organization's president, explained that marketing costs played a big role in the increase but they're being leveraged into other programs. "We have invested in more marketing. We are investing in, given the increased visibility that we have, in major gift giving. And that tends to be a staff-intensive program. So, we have grown (the fundraising program)," he said.

Efficiency kept Save The Children in Westport, Conn., with a cost of 21 cents to raise $1, down from 22 cents a year ago, according to Pat Long, vice president of finance. "You would expect contracts to grow probably in average 2 to 3 percent a year if you're doing well with them. The fact that we overall only grew 1.4 percent means that we brought our cost down significantly," she said. The cost of living increases on regular salaries and some cost of living increases fueled the modest $209,619 increase in FY '00 to $14.7 million.

Ducks Unlimited (DU) was able to increase its public support while decreasing its fundraising costs. "What we do to raise money, predominantly, is we hold events," said Bob Mims, controller for the Memphis, Tenn.based organization. "We hold 4,000 to 5,000 events annually across the country, w0000hich are done by individual chapters, completely volunteer led," he added.

What those volunteer leaders do, Mims explained, is hold silent auctions and raffles, accumulate the proceeds and send the organization a check. "We don't have any professional fundraisers. We have old retired conservation guys that used to work for the state and now work in their homes and run committees. It's quite a complicated task to run 5,000 events."

TOP 5 INCREASES IN FUNDRAISING EXPENSES

Organization                        Fundraising Expenses Change

United Jewish Communities                   42,000,000
American Heart Association                  31,043,041
Larry Jones Int'l. Ministries/Feed
 the Children                               23,622,882
American Red Cross                          16,077,855
Shriners Hospitals for Children             15,238,854
TOP 5 INCREASES BY % IN FUNDRAISING EXPENSES

Organization                        % FRaising Change

Vanguard Charitable Endowment
 Program                                  289%
US Fund for UNICEF                        160%
Larry Jones Int'l. Ministries/Feed
 the Children                             108%
National Wildlife Federation &
 Endowment                                 99%
World Wildlife Fund                        79%