I’m heartened to see the Chronicle of Philanthropy giving ample column inches to the issue of fundraising integrity, with these excellent opinion pieces by Jeff Schreifels and Mark Rosenman.

Jeff’s piece, About High Fundraising Costs: It’s Complicated, makes this argument: “It’s time to make sure everyone understands that direct marketing is about the long run, not the short term.”

He goes on to describe the experience of a client nonprofit that embarked on a determined effort to grow to meet the increasing demands of its mission. The organization went from 40,000 donors and $7 million in revenue to $60 million in revenue now 13 years later.

Along the way, to fund their aggressive growth spurt, over four years they invested $10 million and recouped only $5 million.

That investment strategy worked. And it’s a strategy virtually every direct response fundraiser I know — myself included — would be inclined to deploy if given the chance.

Nevertheless, I wonder …

I wonder what an individual donor’s perspective — during the four year investment spurt — would have been. And I’m not being judgmental at all.

I simply wonder whether someone being asked to donate to that organization would have believed themselves to be helping accomplish that nonprofit’s mission right there and then — saving whales, curing cancer, whatever — or whether they would have been satisfied that their gift was actually being rolled over to finance recruiting more donors and building for the future?

We reassure ourselves that we must use small givers money to acquire new small givers … “there’s no other way”. But we’re actually not very candid about it to the donors involved, are we? Indeed, we disguise the numbers in our annual reports.

Do we ever give our donors the option? Arguably, we could go to the house file and ask for donations aimed directly at financing our new growth plan. Those donors could choose to be part of the grand strategy. But we rarely try that, because we expect the results would be disastrous. And after all, it’s the (net profit) house file that’s supposed to be funding today’s program work.

Am I right?!

I submit that very few small givers feel that they are underwriting the future growth of the cause. They’re looking for impact today, right now. And we direct response fundraisers are loathe to disabuse them of that notion.

Am I right?!

It’s a conundrum. One that in the long run I believe we are better off trying to resolve by putting our cards on the table and looking for other ways to finance acquisition and nonprofit growth.

More on that to come.




This article was posted in: Donor acquisition, Nonprofit management, Transparency.
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