Does Investing in Advertising Imply Returns for Animal Protecting Non-Profit Organizations

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Introduction
Background:

Non-profit organizations do intend to make a profit however instead of the profit being distributed to its owners the profit is put back into the business. The Dumb Friends League (DFL) is a non-profit organization that focuses on giving animals, those who do not have a voice, a voice. The company is headquartered in Denver and is the largest community-based animal welfare organization in the Rocky Mountain region. In order to compete with pet stores and breeders the DFL has to ensure that its message and its company receives publicity or else customer traffic will decrease which may lead the DFL’s profits dropping or going out of business. This hence leads to the question whether it would be profitable for
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Charity Rating American Society for the Prevention of Cruelty to Animals

5. An email from Chris Gallegos the Public Relations Manager at the DFL

Results and Analysis

Results:

During, the DFL reported $3,312,100 in expenses for outreach and fundraising while the ASPCA reported $22,971,916 as expense of media buys, promotions, and related. At the end of year the DFL reported $3,536,000 in profits while the ASPCA reported $29,707,577 in profits. From this information the return on every dollar invested in “advertising” can be derived by dividing profit by the total expense. In the case of the DFL there was a $1.07 return on every dollar and in the case of the ASPCA there was a $1.29 return on every dollar.

Charity Navigator, an independent corporation that evaluates charities, provides access to historical data on both corporations for comparative purposes. In the 2012 period, the DFL received a financial rating of 49.44 while the ASPCA received a financial rating of 54.87 out of 70. This number is compiled based on several financial aspects such as program expenses, program expense growth, and primary revenue growth however what is relevant to this commentary is the fundraising expenses and efficiency. The ASPCA invested at least 7.5% more of its funds into fundraising then the DLF. Solely in terms of fundraising, the ASPCA’s efficiency was greater with a $0.23 return while the DLF had an efficiency of $0.17.

Analysis:

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