We spent some time last week with one of our favorite people. She’s brilliant, wise and a terrific nonprofit marketing strategist. The discussion turned to fundraising for Haiti. We’re all in the business, so the discussion went deep and to the details very quickly. One of the topics that we batted around was the phenomenon of charities using: “100% of your gift will go to XYZ” strategy to raise money.
It was a sparky discussion.
The centerpiece of the discussion was inspired by the “100% of your gift goes to Haiti” as seen in recent fundraising efforts. You’ve seen it, too. The tactic isn’t restricted to Haiti. Many NPOs used marketing language like that following the Tsunami and other natural disasters. You can even find situations where the “100% of your donations goes to the field” hook is used to attract donors for non-disaster fundraising.
Here are a few of the big points from our discussion.
First the good stuff: what a nifty idea to put 100% of your donors’ donations exactly where it should go. 100%! No sleazy fundraising consultants taking fees. No ferret-eyed accounting people getting a salary. No printers wanting to get paid for printing the UrgentGram that brought in all the donations. None of that…every penny of every dollar going to help hurting desperate men, women and children. Nothing but good with that.
Here’s the problem: if it’s true then it may not be good for all donors.
Let’s imagine that 100% goes to the field.
Suppose $100,000 comes in for Haiti relief and 100% of those dollars actually arrive (literally or figuratively) in Haiti. That means other donors who didn’t give to Haiti actually had the fundraising expenses and admin costs DOUBLED on their donations. Why? Because someone has to pay for fundraising. Someone has to pay for administrative costs. And believe me, admin costs in a disaster are not insignificant. Funny what a hassle it is to doing banking when all the infrastructure in a country is gone. But let’s ignore admin costs for this discussion because maybe that could be viewed as part of the actual work on the ground and only deal with fundraising.
Here’s what happened when the Haiti earthquake happened. NPOs called their agencies/consultants and began implementing disaster plans. Prepositioned direct mail launched. Websites were repurposed and focused on Haiti. Email blasts began going out. Social media was deployed. Mobile giving lit up. Money began pouring in and fundraising costs were incurred. Period. No way around it.
Let’s examine the easy one: direct mail. Say the charity did something amazing and convinced their printer and ad agency to donate their time, expertise and paper. All that the charity paid for was stamps. So, who paid for the stamps??? If 100% of the donations went to Haiti, then OTHER donors of the charity paid. No way around it. And I have to tell you, I really doubt everyone but the US Post Office donated their time. So there were big, big bills that were associated with getting relief to Haiti.
Who paid if 100% of the donations went to Haiti?
Those expenses had to come from their giving. And with a few exceptions I’ll list below, other donors paid. (And even in the exceptions, other donors are paying…)
That means that if a nonprofit has a fundraising expense of 12% typically…with 100% of the donations going to Haiti…then some donors ended up footing the bill for this “free” fundraising. Before Haiti, for every dollar they were giving to the organization, 88 cents went to what they expected it to. With the “100% to Haiti” strategy in play, the non-Haitian donors “dollars to the field” may have became 76 cents or less… So no matter how you look at it, some donors pay for other donors to have all of their donations go to the field.
All I’m saying is that what seems like a wonderful thing in a simplistic view isn’t the same when you think about the realities of nonprofit management. 100% to the field might not be a terrific as it sounds. (Even though it is a terrific fundraising hook!).
There are some exceptions to this situation.
- Sometimes a foundation or a major donor will agree to underwrite the fundraising costs in a situation like this. They know they’re footing the bill for the fundraising.
- Other times, ministries associated with churches will have the church underwrite the fundraising. Again, that’s another situation where the people paying the fundraising bill for Haiti are aware of what is happening.
- Sometimes the NPO’s board will allocate special funding from a discretionary fund to pay for the Haiti fundraising (this isn’t quite as clean as the other exceptions, since those dollars probably came from donors at some point but that’s splitting hairs).
I know why the 100% goes to the field-thing happens. It is seductive. Seductive for the donor. Seductive for the nonprofit trying to help in a terrible disaster. Seductive for the strategist trying to help raise dollars to save lives in Haiti. But like many things seductive, the temptation should be resisted. What donors think is happening, isn’t what is happening. And that doesn’t build relationships. Which isn’t the way to go.
Your organization must tell donors the truth, not just tell them what they want to hear. And not just the “truth” but also tell them the implications. I know, I know, it’s hard. But authenticity builds relationships and relationships will result in more donations than fundraising techniques alone.
OK, that’s the way our discussion went. Now it’s your turn. What do you think about “100% goes to the field” strategy? How does your organization deal with these kind of issues? Can you think of any ways around this problem? What’d I miss? As always, I want to hear what you think.
Also, this is Monday and so it’s time for a Good Job Monday shout out. We’ll give a Good Job Monday shout out to Bruce Karr who runs The Farm in Snohomish, WA. See this article for details of the amazing work Bruce is doing in his community. The photos in the article are worth a thousand words! Good Job Bruce!
(photo credit: bp6316 is alive)