Managers, donors, regulators and reporters care about fundraising cost ratios (donations divided by costs) despite their many shortcomings. In this paper we discuss the unintended but harmful side effects resulting from the pressure to minimise cost ratios in the areas of compliance
and regulatory costs, misleading solicitations and misled donors, inefficient generation of donations, and inefficient provision of services. We conclude with a brief discussion of alternative approaches to stemming fundraising abuses.
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