30 responses to “Your Views On The ‘Trick Or Tweak’ Debate?”

1. Jeff Nickel says:

   November 18, 2014 at 6:25 am

   I’m not surprised — and in fact have worked with clients to help them think about how they might be able to make the same offer — all donation gifts go to program because the overhead has been covered. I think the power of the offer is undeniable.

   At the same time, having just heard Dan Pallotta again last week at the SAWA conference address the double standard of overhead for nonprofits I’m a believer in wanting to help educate donors about the need for overhead and the greater impact of more net revenue unleashed to do good.

   Our industry needs the so-called watch dogs to get a clue and see what an emphasis on measuring real impact vs. overhead can do to change the world.

2. Simone Joyaux says:

   November 18, 2014 at 7:35 am

   Without reading the article you refer to… here are my thoughts.

   I am FED UP AND ANGRY AND ANNOYED by the “all your money goes to program.” Without overhead, there is no program. Somewhere along the historical trajectory, some organizations started saying “all of your gift goes to program.” Which was undoubtedly a misrepresentation or outright lie.

   There is no business – except fundraising – that talks like this. Like it’s bad to buy insurance or clean the building or hire a fundraiser or or or …. What a bunch of crap. And the watchdogs, as Jeff above says, are part of the problem.

   Quit even talking about overhead in your solicitation. It costs $XX to feed little Sarah for a week. (And the internal calculation includes all costs, not just the cost of the actual food.) Start some humorous direct mail talking about the insurance costs required to run the building where the youth programs happen.

   Whatever. Quit apologizing. Quit assuming our donors are so stupid that we have to seduce them with “program only.” Quit reinforcing the poverty mentality of the sector.

3. Rebekah Basinger says:

   November 18, 2014 at 7:58 am

   I read your post in a well lit, warmly heated room as a wolfed down my morning oatmeal — all overhead expenses. The special projects ahead today will go smoother because of these things and the same is true for everyone I know. It is a tragedy that when giving, we consider support for the essentials of doing mission to be a bad thing. As a result of overhead aversion, too many charitable organizations are shivering in the cold, hungry for the support to undergird the “real” work of their days.

4. Jay Love says:

   November 18, 2014 at 9:15 am

   Sorry, Tom, but I must jump on too. Perhaps the trickery works for Charity:Water or perhaps it is the splendid methods of thanking you as a donor and their superb after the donation communications…

   No matter what, hopefully it will make no difference to the most important gift, which is the SECOND gift from any donor!

   Then we start realizing “LIFETIME VALUE” and understanding the overhead is needed in everything from the poorest home in Africa to our country’s very own White House and it’s large staff…

5. Maria Ros Jernberg says:

   November 18, 2014 at 9:25 am

   Simple tweak??? When I first read the article you are referring to I was so upset. How on earth could anyone suggest it’s a simple tweak to do what they’re suggesting. I’d say that trying to make it sound like “none of your money goes to overhead” is fundamentally undermining the work of charities. It’s far from a simple tweak.

   What if every donor thinks “someone else can cover that”? Someone else can’t always be responsible for making things happen.

   Donors want transparency and I think we should give them transparency. But transparency for me is being open about all the things it takes to do what charities do, to deliver the results and the long term impact.

   Of course we have a huge responsibility to use the donor’s money in the best way possible. But giving people the idea that overhead doesn’t exist is not the right way forward.

6. Simon Scriver says:

   November 18, 2014 at 9:36 am

   I hate the 100% model, for most of the reasons I already put in writing over at 101 Fundraising: http://101fundraising.org/2014/01/dont-donate-charity-water/
   And huge love the the commenters above!

   Yes it works short-term, but long-term I believe it’s damaging. So as a fundraiser ask yourself if you want to hit THIS YEAR’s targets by any means possible, or if you’re actually in this sector to change things for the better for good.

7. Mary Cahalane says:

   November 18, 2014 at 9:55 am

   Joining the chorus here. It’s short-term thinking, and it’s essentially dishonest.

   What happens to the charity funded this way when the sugar daddy finds another cause?

   I know that three of the biggest watchdogs have started to come around on this (http://overheadmyth.com/letter-to-the-donors-of-america/). But I think they – and we – can do more.

   As others have said, donors deserve transparency and the respect to know that, given honest information, they can make good choices. Are there charities out there, living large and doing little? Maybe a handful. Most are struggling to make miracles happen every day. Donors give to be part of that. Separating “program” or “mission” from the process of raising the necessary funds, or managing the operation is wrong. Wrong for the sector, wrong for the donor.

8. Nancy Schwartz says:

   November 18, 2014 at 11:04 am

   Crucial detail: Charity Water is solely a pass-through organization—it funds other organizations working in the water arena, rather than implementing its own programs. As a result of this structure, its overhead costs are minimal.

   Just some context for this very worthy fundraising poster child!

9. Adrian Salmon says:

   November 18, 2014 at 11:23 am

   Respect to all the arguments above. And yet, and yet…the test results speak for themselves. This is a message donors seem to really want to hear, and we’re meant to be ‘donor-centred’, right?

   Charity:water isn’t scamming its donors. It’s found a way, #1 in Tom’s article, of delivering this, and it says how it does this as well in its fundraising materials. Also look at Comic Relief, one of the UK’s most successful charities. It says this on its ‘Our Finances’ page:

   “In order to run itself in a professional and effective way Comic Relief incurs necessary costs. Raising funds, making grants and organisational overheads cost real money.

   Despite these costs, Comic Relief is committed to making sure that every pound the charity gets directly from the public is a pound that goes towards helping transform the lives of people dealing with poverty and social injustice. This includes the cost of making sure that our grants are allocated to good projects and properly monitored and evaluated.

   All other Comic Relief costs relating to fundraising and organisational overheads are covered in cash or in kind from all types of supporters like corporate sponsors and donors, suppliers, generous individuals and government (including Gift Aid) as well as from investment income and interest.”

   This seems like smart fundraising to me. You can’t educate everyone about overhead. You’re welcome to try, of course, but I suspect you will end up very angry and frustrated at peoples’ intransigent refusal to accept your arguments.

   And you could ignore it, as Simone suggests, but the problem is that it seems from the results in the tests that, whether you mention it or not, donors are probably thinking it.

   So why not be smart and find a small number of people, like charity:water and Comic Relief have done, who do understand the argument? And make use of their generosity, wisdom, and sense to get a big bump in income from the rest?

10. Ben Betz says:

    November 18, 2014 at 11:33 am

    Also joining the chorus in terms of general annoyance with this very real phenomenon… But how do we address it constructively? Are there methods being tested to work around donor aversion to funding overhead … or brief language or phrases that can be used to make overall funding and the importance of overhead more salient … etc?

    Perhaps the biggest miss here by donors is that by funding “overhead” they are not just paying rent, utility bills and salaries, they are in fact making their own donation count more by supporting more fundraising, so it’s an investment that grows and in the long term will fund more of the programmatic work. But I guess finding a quick way to explain that is a steep mountain to climb.

    Side note, per Nancy’s comment — I didn’t realize Charity Water was simply a pass-through organization. In light of that, their “no overhead” tactic really costs them some respect from me, as it comes not just from creative bookkeeping or budgeting but from blatant dishonesty, since presumably the organizations and programs they fund put some of that money into *their* overhead. IF that’s the case (I don’t know that it is), then Charity Water’s promise is pretty unethical and they are just leading us all in a race to the bottom.

11. Giles Pegram CBE says:

    November 18, 2014 at 12:42 pm

    Sorry, Adrian, but I agree with most of the commentators. Implying income can be raised without fundraising costs is unethical, misleading and plain wrong.

    I am surprised at Tom, who almost always talks strong, donor foccussed common sense.

    Donor’s should be led to understand that fundraising costs money. To create a two tiered system where some charities have fundraising costs, and some don’t, is bad for the sector.

    I urge Tom to re-consider.

12. Adrian Salmon says:

    November 18, 2014 at 1:00 pm

    In fairness to Tom, Giles, I don’t think he’s straightforwardly suggesting that, as his ante-penultimate sentence ‘Or is this just a trick..’ makes clear. I think he is genuinely asking us the question.

    And in the test above, there was no suggestion made that the fundraising didn’t cost money. The prospective donor was told that there was an overhead, but that it wouldn’t affect their gift.

    And both charity:water and Comic Relief say essentially the same thing – ‘fundraising costs money, and yes there are overheads, but we have found a way to cover those costs without affecting your gift.’

13. Ian MacQuillin says:

    November 18, 2014 at 2:09 pm

    I’ve written a lengthy response to this research on the Centre for Sustainable Philanthropy’s Critical Fundraising blog – Why We’re Still Robbing Donor Peter To Paul Fundraising Paul – that explores many of these issues in depth – bit.ly/1qjukWW.

    We’ve had plenty of these zero-overhead solutions in the UK and I’ll be preaching to the choir here in my condemnation of them.

    What is noteworthy is that this research was conducted by behavioural scientists and behavioural science is the next cab off the ‘next big thing in fundraising’ rank. However, we’re increasingly trying to implement insights from behavioural science without sufficient fundraising context and this research is another example: just because behavioural scientists say we can do something, doesn’t mean we should do it.

    But what is good about this research is that it argues against the idea that the ‘overhead aversion’ is, as economist have argued, because donors regard high overheads as a sign of inefficiency. Instead they say donors feel their personal impact is enhanced if all their donation goes directly to ‘the cause’.

    So we can use this research as a kind of counterfactual to engage with donors. We can say:

    ‘If we asked you to cover our overhead costs so we could give the impression we don’t have any, this research shows you the great results we could achieve. However, we can’t go down that route without damaging the reputation of the sector as a whole and possibly inhibiting other charities’ chances of securing donations. So let’s talk instead about how we can help you to maximise your personal impact with us through your gift, how you can help us encourage giving in other ways, and how you might use your influence to change the way people think about charity overheads.’

    Ian MacQuillin
    Rogare – The Fundraising Think Tank
    Centre for Sustainable Philanthropy
    Plymouth University

14. Robert Tigner says:

    November 18, 2014 at 6:17 pm

    I am not a fundraiser — merely a long-time interested observer. I add this comment with no disrespect meant toward the many comments that precede it.

    I believe the question posed has a simple answer: fundamentally, a promise that “100% of your donation goes to program” is a straight-out deception. It COULD not be true. No one does anything without overhead of one form or another. Money is fungible. Properly regarded, every dollar in is spent just like every other, distributed across all organizational activities. 100% to this or that is nothing less than phoney-baloney bookkeeping. Enough already (tempting studies about what might be gained notwithstanding).

    I promise you I mean no offense to any of the thoughtful commenters. I am prejudiced. I have been fighting the misuse of fundraising ratios by watchdogs, regulators, and legislators all of my professional life. Personally, I could not get on board with “if you can’t beat ’em, join ’em.”

15. Adrian Salmon says:

    November 18, 2014 at 6:43 pm

    Wish there were more people around like you, Robert. Then we could all just get on with fundraising, and people responding or not responding to them according to how well we made our case for their help.

16. Tom Belford says:

    November 19, 2014 at 1:03 am

    What a great conversation!

    If I can defend my honor just a bit.

    I haven’t endorsed ‘deceive the buggers’.

    I endorse full honesty and transparency.

    But clearly there are a multitude of donors — and I’m particularly referencing the small donors direct marketers are commonly seeking — with a resistance to giving because they worry that their gift just might not make a difference. And yes, clearly some of them would rather see their $25 go to buying food for the kid than paying the pension of the fundraiser.

    Maybe that’s myopic on their part, but it’s the reality of their perception, and we shouldn’t crap on them for having it. And, I might add, it’s a perception fueled regularly by reports of fraud and deceit in the charity sector.

    If we want to exclude all potential donors who have this perception on the basis that they — being so short-sighted — don’t ‘deserve’ to be donors, then we might as well assume our donor universe will drop by, what, 50%? More?

    So if — on a totally honest basis — a nonprofit can disarm that small donor concern by pointing to a genuine alternative way they have of funding ‘overhead’, I say more power to them. In my post, I called those nonprofits ‘lucky’, as I believe they are few and far between.

    Adrian Salmon gave two examples of credible claims — Charity:Watch (which is not a ‘pass-through’ organization … they buy/own drilling rigs for god sake) and Comic Relief.

    In fact, I align myself with all of Adrian’s comments. To ignore this concern about potential ‘waste’ (on ‘overhead’) and wanting to make a difference with a small gift would, in my view, be the opposite of taking a donor-centric approach. It certainly ignores human nature.

    Some honest organizations have taken that concern head-on, responded to it (as opposed to denying it exists or denouncing donors for having it), and presented donors with an approach that alleviates their concerns in a truthful manner.

    I wish all nonprofits had that opportunity. 99% never will.

17. claire axelrad says:

    November 19, 2014 at 5:23 pm

    Tweaking by lying? Hmmn… I could also raise more money, perhaps, by overstating the numbers of people I serve (you know, by counting every single Q & A phone call). It might be “technically” sustainable, but only half true. And as one of my favorite old proverbs states: “Beware of a half truth. It may be the wrong half.”

    This article reenforces the myth that the less spent on overhead, the better. While exorbitant, unnecessary spending is wasteful, the same cannot be said for extra spending that helps more people at a somewhat more expensive ratio. Would you not spend 3 cents on the dollar to cure cancer if 2 cents on the dollar couldn’t yield that result? Of course you would!

    It’s going to take a concerted effort on the part of nonprofits to overcome years and years of pounding the overhead myth into people’s heads. Sadly, 62% of the American public now believes nonprofits spend too much on overhead. So a new charity that needs to spend 30 – 35% to develop programs and ramp up services starts out in a hole that’s very difficult to dig out of — regardless of the fact that they may be saving lives, restoring the environment or doing all sorts of beneficial things that really couldn’t be done for less expense. Even established nonprofits have this problem. Everyone needs to spend enough to get the job done. If you don’t have enough, you may as well have nothing. As you undoubtedly know, the Stanford Social Innovation Review calls this phenomenon The Nonprofit Starvation Cycle.

    It’s time for nonprofits to stop seeing themselves as bloated when they’re really not. It’s a bit like anorexic behavior. It’s unhealthy and creates a negative role model. There are other ways to respond to donors who ask about overhead expenses. I’d really love to see nonprofits eschew this form of patting themselves on the back.

18. Denisa Casement says:

    November 21, 2014 at 4:04 am

    I’m going to do something I thought I’d never do… disagree with Adrian Salmon. We have a responsibility to steer our donors toward the reality of the issues our organisations address.

    In our case the easiest ask that gets the highest response rates is buying a meal for a homeless person. We do use this the most in Acquisition. It’s concrete, easy to understand and emotive. But once someone has begun to give to us we start to talk about the bigger picture of addiction, mental illness and social exclusion. We use very personal stories to illustrate the complex reality of our clients lives.

    We have learned not to underestimate our donors empathy and understanding. Our most successful appeal of 2013 was to fund the salary of a mental health nurse. That’s right, a staff salary. Our donors funded a 4 year pilot programme in under 8 weeks.

    We approach our ongoing donors differently than we approach acquisition. Our retention for cash donors is over 65% so we don’t think educating our donors about the complex reality of our work has caused problems. We think it has built a core of very loyal donors without alienating our more casual donors. It really is about how you tell the story.

    I feel the same way about the bogus 100% claim. This is nothing more than a bookkeeping exercise. It reinforces ignorance among donors. It would be like my charity continually telling people that all we need to do is buy people a meal and we’re solving the homeless problem when we are actually using the money for everything from mental health care to drug free rehabilitation. Grow up and tell the truth…tell it well and with emotion,

    Charity:Water (what’s with the colon?) does not make their method for covering overhead clear to the general public. It’s there but you would have to look for it and most donors wouldn’t look hard enough to understand what’s going on. We all see it easily because we’re in the biz. But most donors see 100% and nothing else.

    It’s damaging to the entire sector. It’s a shame because so much of what they do is fabulous and I want to admire them. But it is a cheap PR trick and they’re fundraising is as driven by this trick as by their terrific tracking and report back process.

    It’s a trick and it’s not just a trick on the donors it’s a terrible trick on the entire non-profit sector.

19. Pamela Grow says:

    November 21, 2014 at 6:16 am

    Absolutely brilliant, Denisa. An Agitator raise coming for sure.

20. Adrian Salmon says:

    November 21, 2014 at 10:16 am

    Ah, Denisa, it wouldn’t be a decent debate on a topic if everyone agreed, now would it? Someone has to put the contrary view as well as they can 🙂

    And Claire – the charities who say this aren’t lying. If they were lying, and there really weren’t any other donors, or trusts, or companies funding their operating and fundraising costs, then that would really be bad. But since they have this so publicly on their website – on the ‘About Us’ page, just where you’d expect to see it, I assume they are telling the truth. We could all check this by asking for their Annual Reports.

    So let’s assume that they are telling the truth, and that because these other donors are already in place, not a penny of the appeal income they receive from us smaller donors has to cover the cost of sending it.

    This may in fact, far from being a lie, be one of the few unequivocal pieces of truth told anywhere in the charity sector.

    And for my Exhibit A I would like to present you with one little word:

    ‘Could’.

    Magic little word isn’t it? Hands up who’s never used it in what I call the Appeal Copy Two-Step?

    It makes all seemingly restricted gifts available for general purposes.

    ‘Your gift of £25 could help a child just like Charlie.’

    ‘Your gift of £10 each month could save another beautiful tiger just like Rufus.’

    And even if we do up the ante a bit and send donors updates about ‘their’ child or ‘their’ tiger, we (and the donors) know there are thousands of donors sponsoring Charlie or Rufus. And not all the money can be going to them, truly. But we collude in the suspension of disbelief.

    So here is something that is actually true. A wealthier donor than me is covering the cost of making sure that all of my £25 goes where I hope it’s going. Wow. As a donor that makes me feel great, I can tell you.

    And we are accusing these charities of lying, or saying that they shouldn’t have put all that work into selling such a seemingly unsexy proposition to major donors and corporates?

    I think that smacks a little of being very selective in our saintliness.

    Instead we should be inviting them to tell us how they do it! How do they hook those big givers (and they must be pretty big) on funding admin costs? How do they steward them so they do it again the next year? I would certainly like to know.

    And sure, let’s try to drip feed and (gently) ‘educate’ our donors. Maybe in 10 years or 20 or 30 enough of them will suddenly get it. But why not get a load more of them in the meantime?

21. Lesley Pinder says:

    November 21, 2014 at 11:24 am

    it’s so interesting as I can see both sides of the argument and yet I agree wholeheartedly with Adrian. I believe it is both possible to let donors know about the realities and real costs of running a charity whilst also offering them the chance to fund the bit of that charity’s work that they find most interesting. I don’t think this equates to lying to donors, in fact I think it is more transparent and honest than some of the ‘accepted’ ways we communicate.

    I’ve asked this before when this debate appeared previously but will ask again…

    Lets say that you had the choice. You have a brilliant funder, or investment, that means your overheads are covered for the next five years. Your audience research and insight tells you that your donors and prospective donors would prefer it if all their money went towards your work in the field. You test the 100% model as a proposition and find that donations to your charity increase significantly. If you changed to that model for all your public fundraising, you could raise more and your charitable mission sooner. Would you do it?

    Purely hypothetically of course!

22. Robert Tigner says:

    November 21, 2014 at 4:08 pm

    Okay, fine. So I’m stubborn (family and friends can attest). Adrian says “Charity:Water and other charities who use the ‘100% model’ (raising funds for overhead, promising prospective donors all of their donations go to program) are not telling lies, they’re telling the truth.”

    Consider this: Charity embarks on recapturing lapsed donors at the $50 level via telephone calls. Calling Firm places those calls for $4 per contact. Charity has done the arithmetic. It will spend $1200 to bring back twenty donors who will WAY more than pay for this overall transaction in a very short while.
    Caller places a call to Donor and says, “Hello, my name is Caller. I work for Calling Firm. We have been hired by Charity to reach out to you.” Logically, and somewhat predictably, Donor asks, “How much of my gift ($50) will be going to Charity?” Caller replies, “$46.”

    With respect to Donor’s gift (or to any other donor’s gift), this is not a lie, is it? But is it the “truth”? Parsed to the individual, dissected transaction Caller’s statement is verifiable. But does it “truthfully” give the donor the larger picture or, for that matter, really answer her question? I think not. I don’t see how the “100% model” is any different.

23. Adrian Salmon says:

    November 21, 2014 at 5:43 pm

    Okay Robert, I’m a bit stubborn too. That’s a false analogy.

    Clearly if the campaign costs $1200 and the charity will only raise $1000 from the initial calls, for the caller to say to the donor that 96% of their gift will be going ‘to charity’ is untrue. And very clearly so.

    In fact in the UK, where I’m from, it is mandatory for telephone fundraisers at some point in the call (usually the end) to tell donors the entire cost of the telephone campaign they are undertaking, and how much the charity expects to raise as a result, precisely to avoid that kind of subterfuge.

    But if that call were made under the ‘100% model’ and a real live donor had actually stumped up the cost of the entire telemarketing appeal, lock, stock, and barrel, so that the charity was not paying for it out of the income generated, then it would be absolutely fine for the caller to say to the donor, “Because this donor has done this, 100% of your gift tonight will be going to do X”.

24. Denisa Casement says:

    November 21, 2014 at 5:44 pm

    So Adrian, you think we can educate donors over the next couple of decades if the most popular fundraising pitches involve the 100% model? I think it is going to create an overall sense of unreality that further restricts fundraising & truly traps many in the Nonprofit Starvation Cycle.

    It really reminds me of how the public used to believe that all charity work should be done by volunteers. They didn’t want to give to any charity that paid staff salaries. In virtuous and well run charities all work should be done by volunteers.

    I wonder what the reaction would be if a few high profile charities started touting a “volunteer only” organisation that ensured no donations would be used to pay staff salaries. So innovative, so donor centric… after all it’s what donors want.

25. Denisa Casement says:

    November 21, 2014 at 5:52 pm

    Much of this debate in favour has been predicated on the explanation to the donor about someone else paying the overhead. That argument is assuming donors think like fundraisers. They do not. Most hear only one thing… 100% and that concept becomes shorthand for honest & virtuous by default condemning any charity who can’t massage their accounting accordingly.

26. Adrian Salmon says:

    November 21, 2014 at 6:35 pm

    No, Denisa, I’m with Jeff Brooks – I don’t think we can educate donors full stop, and I don’t think we ever have educated them successfully on anything, unless it was information they already wanted to know.

    A lot of people still do believe charities should be run by volunteers. In a poll of 1000 people in the UK two years ago, 33% of people said they thought charity chief executives should be unpaid. A substantial further proportion thought they should never be paid more than £30,000 per year. People really don’t like the fact that there are folk like you and me taking home a pay-cheque from charitable causes.

    But you know, saying donors ‘only hear 100%’ is a little patronising. I have spoken to quite a few non-fundraiser friends about what I do over the years, and one of the first things they all say when I talk to them about my job is, “I’d give more to charity if I didn’t think it all got swallowed up in admin”.

    Also, we already live in a world where some charities use the ‘100% model’ and some don’t. Some because they can’t and some because they won’t.

    And the sky hasn’t fallen in yet. Comic Relief has been around for 30 years and other charities haven’t gone bust as a result of it. In fact as a grant-making charity its 100% model has probably been vastly beneficial to many smaller charities who rely on it. charity:water has been around for 7 years and there are still plenty of other water charities about.

    I just don’t see why a charity who decides to try this – as long as they can say it truthfully and honestly – should have to prepare themselves for the cold shoulder from the rest of the fundraising community.

27. Dan Fletcher says:

    November 23, 2014 at 10:47 am

    This remains an interesting and somewhat polarised debate. I’m going to side-step whether Comic Relief/charity:water are fundraising’s bogeymen or superheroes and pick up on the final comment in the Science Mag article that sparked this discussion – http://news.sciencemag.org/economics/2014/10/simple-tweak-could-nearly-double-amount-you-give-charity. Uri Gneezy states that ‘It’s not a ‘trick’ or ‘nudge’ or ‘irrational’—it is a different feeling that we get from our donations.’ Adrian also uses the same phrase above when commenting on the impact of knowing his £25 all goes where he wants it to. He ‘feels great’.

    What the donor/prospect ‘feels’ is important. More important I’d say than the Mr Spock decision-making mentioned above. I’m not 100% sure in the research what made the donors feel like giving to one charity or the other. It is probably a combination of ‘overhead aversion’, valuing efficacy as Ian MacQuillin points out, plus a combination of other factors. These may be wanting to be associated with a charity that has already attracted considerable support rather than one that hasn’t, ie their gift is validated by others. It even be down to their resonance with the cause, when they last had a drink of water, whether they have younger siblings, …

    The important thing for us fundraisers is to be bothered about how we make our donors feel, and do as much as we can to make them feel great. In the UK, for some profit companies are quite overt about this – eg Moneysupermarket (http://www.thedrum.com/news/2014/08/08/youre-so-money-supermarket-campaign-returns-trunk-competition) and Virgin’s Rock Star service. As fundraisers, we should be able to emote stronger feelings than corporates can.

    Adrian’s right that we can’t fully educate all donors. That doesn’t necessarily mean we should all promote the 100% proposition. What we should all do is make sure that whether or not we’re asking donors to cover overt or hidden ‘overheads’ they feel great about it anyway, regardless.

28. Denisa Casement says:

    November 23, 2014 at 11:55 am

    “I’d give more to charity if I didn’t think it all got swallowed up in admin”. EXACTLY! They see it as all or nothing. Instead of an honest conversation about reasonable overhead, the 100% model reinforces the idea that all overhead is evil & wasteful. It reinforces the idea that charities should live by a completely different set of rules than any other enterprise on earth.

    I’d love to see a statistical sampling of donors who gave based on the 100% model and find out how many of them can give even a basic explanation of how the 100% model works in reality. I am willing to bet only a very small % (probably larger donors) have any idea how it works.

    The biggest problem I have is that they use the 100% model as a central part of their value proposition and it is presented and perceived as a number by which their efficiency(and by default other charity’s efficiency) is judged. That’s complete nonsense. They spend 84% on programmes the same as my charity does. It’s a commendable number but we wouldn’t put it at the centre of our value proposition.

    Their transparency over how they accomplish the 100% model has definitely improved over the last few years as they’ve come under criticism. It now appears prominently on their landing page (at the bottom of a very long scroll but still up front). I don’t remember it being that easy to find or that clearly explained in the early years (my memory could be wrong).

    The reality is they are touting themselves as a more efficient organisation based on creative accounting. It’s all technically factual but not really a true picture of their cost structure or their efficiency. Yes, the info is all there but as marketers we know the in-depth info is only to keep the few happy and won’t be seen by the masses.

    Bottom line – this is just a form of creative accounting and in a world where we’ve all been sc%#*ed by creative corporate accounting is creative charity accounting really where we want to go?

29. Denisa Casement says:

    November 23, 2014 at 12:43 pm

    Just to be clear… I think charity:water is a fantastic charity, barring my disagreement over the 100% model, I think they are innovative, well managed and truly passionate about their mission. They do everything at an astounding level of excellence.

    I consider this to be an internal, professional debate about methodology and would be very saddened if our debate is construed as wholesale condemnation of a truly remarkable charity. There’s so much to admire about the work they’ve done and the standard of excellence they maintain.

30. Matthew Sherrington says:

    November 26, 2014 at 8:43 am

    I’m late to this party, and what a fascinating discussion thread.

    For what it’s worth, I believe strongly that non-profits are whole organisms and pretending they are not and survive on air is a mistake. However, I think “educating” supporters is a hiding to nothing. I also believe in the donor-centered-ness (a bit of US spelling there to reach out) of tailoring a funding opportunity when it’s possible to do so (and that has to include not being to the detriment to the whole organism.

    Rather than wade in on either side of the polarised comments above, here’s a different thought. We as fundraisers only have ourselves to blame. For ever, non-profits have been selling off the crown jewels of their programmes to commissioning bodies, corporates or major donors, making it very attractive by masking or not including the real costs of delivery, while using the general “unrestricted” income from the mass of smaller individual donors to mop up. Their money really is the most valuable, because it reaches the parts the bigger donors won’t often touch, yet we don’t give them that respect. And if you interrogate the Annual Accounts of any profit with sizable restricted income (grants or contracts), and look at where restricted and unrestricted money goes, I guarantee you will find that the proportion of a un-restricted pound or dollar that goes on programme is much smaller than the overall ration published. Does that matter, no, probably not.

    But what does matter is the double-standard. This debate about tricking or not the public donor over the cost of admin is in the context of denying them the choice we offer the bigger donors and funders, who frankly, by virtue of being bigger generally have more access, get more information, and should know better.

    Why are we giving the individual donors a hard time for not understanding admin better, when we should be taking the case to the donors and funders who really do understand overhead. A corporate refusing to contribute to overhead? Please. Show me a company with a profit margin of over 70%, because that’s what charities effectively deliver.

    If we got the bigger donors to take a more realistic view of the cost of the whole, instead if expecting small voice-less donors to subsidise them, then maybe we’d have more opportunity to be offer more attractive deals to everyone.

    Asking major donors to fund admin, as Charity:water and Comic Relief do, is just reversing what we’ve all been implicitly asking of our individual supporters.

    Transparency and honesty starts at home.

    (My latest column for Third Sector is on this admin debate too – the danger of making a virtue of overhead, as Dan Pallotta is attempting with his Charity Defence March. A bit like Richard Nixon when he said “I am not a crook”, it’s best not to draw attention to something you don’t want people to think too much about)
    http://www.thirdsector.co.uk/marching-cause-charity-overheads-not-likely-generate-public-sympathy/communications/article/1322401