Who benefits from your direct marketing?

September 29, 2016      Kevin Schulman, Founder, DonorVoice and DVCanvass

Lenny Briscoe of Law and Order fame would never have said cui bono.  He would have dismissed it as fancy lawyer talk with a quippy, world-weary one-liner.
lennie_briscoe
But like every good investigator, he believed in cui bono, Latin for “who benefits?”.  The idea is that the person most likely to have committed a crime is the one who benefits from it.

I was put in mind of this when we here at DonorVoice got this email from Care2:

“You might be interested in a revenue sharing arrangement many of our agency partners enjoy.  Care2 works with hundreds of agencies and consultants around the world helping their clients connect with our 40 million members who are passionate about causes.

Because we value our partnership with these firms and the help they provide Care2 clients, we’ve developed a revenue sharing partnership.

Many Care2 agency partners are earning over $50,000 per year from Care2, all while doing what they do already, helping their clients connect with Care2 members to find amazing supporters and donors.”

I should state here I think Care2 has a valuable service.  I’ve never used it because of budget constraints, but I’m intrigued by the model.

And I don’t (necessarily) find this type of agreement to be unethical if disclosed.  But I’ve had Care2 recommended by vendors in the past without this disclosure. Now I wonder if they had this type of agreement in place.  And then it makes me wonder cui bono?  Was it recommended to me because it’s a good service or because the agency partner was getting more than $50,000 per year from Care2?

It makes one think of ugly words like “kickback.”

I was reminded of the time I had a vendor who accidentally put active donor names into a lapsed telemarketing program.  They got a payment for every call that was made.  When I saw the mistake and realized the people who made the mistake got paid for making the mistake, I suddenly put the appropriate scare quotes around “accidentally” and “mistake.”

It’s not to say it wasn’t an unintentional mistake.  I just have a rule about conspiracies: if the outcome of something is the same as it would have been had there been a conspiracy, then it really doesn’t matter if there was a conspiracy or not.

In our recent multi-gift webinar, Josh Whichard highlighted the volume model of fundraising:

  • We have 14% fewer donors but are only mailing 7% less mail
  • We are sending 49 emails per year on average, a new record
  • We are adding channels like social, online advertising, DRTV, mobile, etc.

And yet our retention rates and gifts per year are on average the same as they were a decade ago.  We are the hamsters on the wheel, exerting ever more effort to stay in the same place.

He also talked about a multi-gift program as one of many solutions to the flaws in the more-from-more model.  You can see a recording of the webinar here.

The bigger question I have is, as you might get, cui bono?  Who benefits from volume that doesn’t lead where it should or used to?

At a panel at DMANF DC, I asked a panel of list cooperative folks when they see diminishing marginal results – that is, how many organizations does a person have to give to to be less likely to give to the next one than they were the last.  That is, if someone gives to 25 organizations, are they as likely to give to the 26th as they were to the 25th?

The representative from the co-op said there wasn’t such a point: everyone who gives to another organization is always ever more likely to give to the next one.

This is mathematically impossible.

Somewhere on that co-op’s file is the person who gives to the most nonprofits – let’s say it’s 42 since that’s the answer to life, the universe, and everything.  Since they have never seen anyone give to 43, that would have to be the point of diminishing marginal returns.  It’s probably before then, but there (by definition) is a point.

In other words, the co-op’s answer is like saying people get healthier and healthier and healthier until the moment they die, when they are at the peak of their health.

Who benefits from that answer?  The person giving it.  Whether it is ignorance of diminishing marginal returns or a desire not to disclose what’s known, the result is the same – asking a co-op whether you should expand your work with a co-op is like asking a first-grade class who wants a pony.  Cui bono? The co-op.

How many different mail pieces should you send this year?  Ask the direct mail vendor with whom you contract on a per piece basis.  Cui bono?  The answer will be like when they asked Samuel Gompers what labor wants.  His answer?  “More.

What should your mix be of mail versus email versus phone?  I’m sure it’s coincidence that your mail vendor wants more mail, your email vendor wants more email, and your telemarketer wants more calling.  Cui bono?

And that’s how you get to a schedule of overlapping communications that may or may not be related or coordinated, with little knowledge of the donor beyond a wallet and an address.

Heck, if you use DonorVoice’s feedback tool, we benefit from it.  Hence, I benefit from the week of feedback blog post I did last week.  You likely have to take it with a grain of salt as a result (hopefully, it was powerful and persuasive even though I benefit from it).

I’ve gotten sage counsel from many a vendor over the years.  They’ve guided, advised, analyzed, and counseled.  I’m better for their advice.

But you might have a sneaky suspicion that the model that got you here isn’t the way to proceed from here.  When you have that feeling and people poo-poo your questioning, there’s one more question to ask:

Cui bono?