Learning Goal: I’m working on a finance question and need the explanation and answer to help me learn.
Calculate the ROI given the following information:
Let’s assume a nonprofit has a monthly gift program with 5,000 donors who donate on average $275/year. The cost of this initiative is $323,000 over a five-year period. The additional income the organization is forecasted to generate is $510,000 over the same period.
|
Year |
Investment |
Multiplier |
Impact |
|
1 |
$50,000 |
5 |
$250,000 |
|
2 |
$100,000 |
4 |
$400,000 |
|
3 |
$90,000 |
3 |
$180,000 |
|
4 |
$40,000 |
2 |
$80,000 |
|
5 |
$43,000 |
1 |
$43,000 |
|
TOTAL |
$323,000 |
|
$953,000 |