For  years, in The Agitator and as a principal in a direct response fundraising firm, I’ve held firm in my opposition to two types of fees: those based on volume, and the traditional 15% commission fee for purchasing and placement of media.

I oppose them for one simple reason: they align the incentives with the agency or consultant, not with the nonprofit.

Agencies and consultants should be paid for the value they deliver, not the dollars they shuffle. That value might be reducing costs, improving donor retention rates, increasing lifetime donor value, or delivering measurable gains in efficiency.

A commission fee structure tied to spending on production and media placement creates a dynamic where the agency benefits simply by spending more, while the nonprofit’s mission gets drowned under the weight of unnecessary costs.

A Brief History of the 15% Commission Fee

The 15% commission fee is a relic from the Mad Men era (1960s) when ad agencies were paid a flat percentage media they purchased on behalf of clients. Back then, it made a modicum of sense. Media placement was labor-intensive, and the fees covered the costs of planning, negotiating, and placing ads. It was a cozy system, and for-profit clients, flush with cash, didn’t complain much.

As the years went on, things changed. Technology made media buying more efficient. Transparency became a demand, not a luxury. For-profit companies, keenly aware of their bottom lines, demanded new models—value-based pricing, flat fees, performance incentives. The 15% largely disappeared.

But in the nonprofit world? It hung on. It persists like an old habit nobody can explain, kept alive by inertia and a lack of scrutiny. Here’s an illustration; fictionalized to protect both the guilty and  the guileless.

Paws of Hope: A Cautionary Tale

At a particularly contentious October meeting  Paws’ board fired the long-time Executive Director because of the organization’s declining membership base and income.  At that same meeting the board chair pledged a $5 million infusion to help grow the organization’s support base provided they used it to “get professional help”  and “take advantage of the reach of the internet and social media.”

So,  Paws of Hope found itself hiring an agency that still charged the 15% commission fee for placing social media ads. They didn’t know the fee structure was outdated. They didn’t know it was exploitative. They just wanted to help the dogs. They thought they were doing the right thing.

The agency man arrived with his briefcase and his polished pitch. “Fifteen percent,” he said. “Flat rate. Simple. No hidden fees.” He said it like it was a gift.

The membership director, a young man too focused on saving stray puppies to think much about the math of media placement, nodded. He didn’t ask questions. A flat rate sounded clean, reasonable, even modern. He didn’t realize he’d just signed a deal where a $500,000 ad buy would cost Paws $75,000 in agency fees. Or that $1 million would mean $150,000. At $5 million, the agency’s cut would hit a staggering $750,000.

The worst part? The 15% was only for placing the ads. Everything else—creating the ads, analyzing the results, client management—cost extra. The 15% was gravy. And with every additional dollar spent, that gravy got thicker. Paws of Hope thought they were feeding the dogs. In reality they were feeding the agency.

Keep in mind that managing media placement for a $1 million campaign isn’t drastically different from handling a $5 million one. The tasks don’t multiply with the budget; they merely scale. Yet, agencies gleefully pocket the surplus, much like charging extra for a pizza because it’s cut into more slices.

When some months later the Paws’ CFO asks what extra labor justified the steep increase in payments,  the agency guy scratched his head and said, “Well, bigger budgets mean bigger responsibilities.” Bigger responsibilities, indeed—like cashing a bigger check.

The absurdity of it all dawned on the CFO , like a rooster realizing it’s an hour past sunrise. “Bigger responsibilities?” he asked. “You mean, like making sure the decimal point’s in the right place?”

In addition to realizing the absurdity of the flat fee commission structure there were some other insights Paws of Hope became painfully aware of

Attribution: The Game No One Wins

It didn’t take long for Paws to learn about attribution, that hazy art of figuring out which ad deserves credit for a donation. A donor sees an ad on Facebook but doesn’t click. Later, they see another ad on Google, click, but don’t donate. Then, they open an email and finally give. Who gets the credit? Facebook? Google? The email? Each platform steps forward, hand outstretched, claiming their role in the success.

The agency called it “multi-touch attribution.” It sounded scientific, almost noble. It wasn’t. It was a fuzzy mess, a way for everyone to share in the credit—and the media spend. Paws of Hope nodded along, unwilling or unable to argue with the charts, graphs, and jargon.

[Editor’s Note: Many nonprofits believe that digital campaigns bring in fresh revenue. In reality, donations often shift from one channel to another without increasing overall funds. It’s like moving peas around a plate and expecting more to appear.]

Stacking Fraud: The Invisible Heist

But attribution was only the beginning. Then came stacking fraud, a scam so sleek it would make a pickpocket blush. Here’s how it works: ad platforms stack multiple ads on top of each other like a digital layer cake. Potential donors see only the top ad and clicks it. But when they do, every ad in the stack charges Paws of Hope. It’s like ordering one coffee and being billed for the entire menu.

Paws of Hope didn’t know this was happening. They just saw the glowing reports: clicks, impressions, engagement. They thought their campaign was succeeding. They didn’t realize they were paying for nothing, funding someone while their dogs went hungry.

The Unholy Alliance: Attribution and Fraud Together

Here’s the kicker: attribution and stacking fraud often work hand-in-hand. Fraudulent clicks inflate metrics, making it look like the campaign is performing well. Agencies boast about high click-through rates and engagement, but it’s all a house of cards built on deception. The nonprofit pats itself on the back for a “successful” campaign, not realizing it’s been swindled out of thousands—or millions.

So, what’s a nonprofit to do? First, demand transparency. Agencies should provide detailed reports that break down every ad’s performance. Second, use independent tools to verify metrics instead of relying solely on what the platforms or agencies report. Finally, be skeptical of anyone who tells you attribution is an exact science. It’s not. It’s closer to throwing darts at a moving target in a foggy room.

In the end, nonprofits need to approach digital advertising with eyes wide open. Because if you’re not careful, you’ll end up funding someone else’s yacht instead of your mission. And nobody wants to see that. Well, except the yacht salesman.

The Takeaway?

If you’re a nonprofit, think twice before diving into those 15% waters. Otherwise, you might find yourself funding the agency’s new office coffee bar instead of your own cause. And Heaven knows, nobody ever changed the world with a latte machine.

Roger