A sector-wide obsession with the proportion of overall income spent on fundraising is also causing some organisations to avoid investment in new donor acquisition and growth, Upsall will tell the International Fundraising Congress in the Netherlands this week.
"A fundraising ratio is not an indicator of great performance," said Upsall, chief executive of Spain-based non-profit sector consultancy Daryl Upsall Consulting International and former international fundraising and marketing director for Greenpeace International, before the conference.
"Spending a low percentage on fundraising may simply reflect unwillingness to invest in fundraising by the charity, fear of losing its quality branding, laziness of the fundraisers in asking for more investment and a poorly informed board."
He blamed the media and websites such as GuideStar for encouraging a disproportionate focus on fundraising costs as a benchmark for good performance.
Instead, he said, non-profits needed to set tougher growth targets and compare performance with the growth rates of market leaders.
"Non-profits are often too complacent, too happy with year-on-year net income growth of between 5 and 10 per cent," he said. "As benchmarking targets, they should aim, for example, to be in the top 25 per cent in terms of net income growth in the sector as a whole, or within their niche group."
There is too little comparison of peer performance in fundraising departments, he added: "Open sharing of real data could get rid of misinformation and help us improve ourselves."