Final answer:
The financial ratio indicating an event's fundraising effectiveness is Net Revenue / Investment. It shows how much net revenue is generated per dollar invested in the event, assessing the return on investment (ROI) for fundraising activities.
Step-by-step explanation:
The financial ratio that indicates an event's fundraising effectiveness is Net Revenue / Investment. This ratio evaluates how much net revenue is generated for every dollar invested in the fundraising event. To calculate it, the net revenue (total revenue minus the direct expenses) from the event is divided by the initial investment or total expenses of organizing the event. This measure is important for understanding the return on investment (ROI) for fundraising activities. It demonstrates the financial resource generated per dollar spent and helps organizations make informed decisions about where to allocate their funds for future events. When comparing fundraising effectiveness, a higher ratio indicates a more efficient operation, as it signals that more revenue is being generated per dollar invested.