The Great Nonprofit Deception—to donors

If anything is consistent across the nonprofit sector is the persistent—and insistent—requests for funds.  Such requests can take the form of any sort of fundraising appeal or approach.  They can also be third-parties urging more “generosity” for a particular cause or point of view; the classic “let me tell you how to spend your money.”  In a recent report from the Internal Revenue Service, however, something quite startling was revealed.  According to that report, 40% of all charities reported spending nothing—yes nothing—on fundraising.

Hmmmm—how is that, you might say?  There are mostly likely a number of explanations, with the complexity and vagueness of the IRS’s reporting procedures among them.  More troubling, however, is the perception by many—and reported by not a few—that fundraising costs nothing.  Such a statement either belies a glaring naiveté or is simply untrue.

Fundraising DOES cost something.  And although there are charities who make statements like “None of your gift goes to administration or fundraising costs”, thoughtful donors—those who invest in charity, know differently.  To these donors—the ones that will come back again and again if you let them—such statements are simply not believable.

Donors who give because they believe in what you do—not because you sold them something or enticed them with a clever event—want effectiveness.  Selling them on a false economy is not what they want to hear which can be either mildly distracting or a serious breach of trust, depending upon the donor.

Report your organization’s costs fairly and openly.  More importantly, tell the world how you have made the lives of people better.  “The low price” is the refuge of an organization that has nothing better to report.  To do so makes your work nothing more than a commodity—like soap.

Larry C. Johnson

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