What wealth transfer?

For the past four years I've heard development offices talking about the "greatest wealth transfer" in history. Baby boomers were supposed to inherit $41 trillion from their parents and nonprofits were destined to receive huge windfalls.

Not so fast. The Philathrophy Beat blog links to a Kiplinger's article which argues the inheritance transfer may have been overrated. Perhaps the old rules of fundraising still apply and we'll have to keep asking donors for individual donations after all.

A new school year

New clothes, some fresh notebooks, and perhaps a shiny apple - it's back-to-school time across the country. But this year, there seems to be a louder chorus of voices from parents revolting against school fundraisers.

Last week, Barbara Neff posted a School Fundraising Beg Off Form on her blog and asked parents to join her movement against the requests to promote, "ridiculously overpriced, needless things to everyone I know."

The Washington Post ran Michelle Singletary's article its finance section over the weekend. In addition to swearing off selling "candy bars, wrapping paper, tumblers of tiny jelly beans, cookies and books," Singletary also reports some interesting stats:

Retail sales in product fundraising are down. From 2001 to 2005, sales dropped 11 percent, according to a survey by the Association of Fund-Raising Distributors and Suppliers, which represents more than 600 companies that manufacture, supply and distribute products used for fundraising.

Schools and school-related groups such as parent-teacher organizations constituted about 83 percent of fundraising sales, according to the association's survey. Fifty percent of school fundraising sales are made by elementary school volunteers. The average product fundraiser generates more than $2,500 for schools and nonprofit groups. In the 2005 school year, students and parents raised $1.4 billion.

Unfortunately, both of these articles focus on the annoying sales aspect of these fundraising programs and not on the larger issue of why public schools increasing need to use private fundraising programs. Don't Tell the Donor found a great op-ed article in Sunday's LA Times that blames Prop 13 for bringing "the California public school system from nationally admired to roundly pitied."

Is this really a better alternative to local taxes?

House cleaning always helps me find surprises

Several friends to the Don't Tell the Donor family have pointed out some really interesting fundraising and donor blogs I've previously overlooked. So here are three sites with posts I found very interesting:

* The Donor Power Blog, which I assume is run by the folks at MERKLE l domain has practical hands on advice for all aspects of fundraising. But the current top post addresses an article in Target Marketing every direct marketer must read as they prepare year-end appeal plans. Bottom line is: stop putting low dollar donors in mail. They also have another post following a wrap up of a conference presentation from the last DMA Nonprofit Conference.

* Getting Attention! - an awesome blog that prides itself in "Helping Nonprofits Succeed Through Effective Marketing" posted several awesome findings from the DMA Nonprofit Conference in New York recently. Nancy E. Schwartz should be recognized for her ability to weed through all the boring crap in some of these sessions in order to really find the true nuggets. I recommend her article on "Making the Most of Online Fundraising."

* Last, but not least, the Nonprofit Blog Exchange has the making of something great. It's taken me months to cull through all the fundraising blogs on the web today... and I am sure I haven't scratched the surface. I plan on going to this site everyday - just hoping to see if they have updated content or to see if its blogroll has grown.

How much does the punter cost?

Dave Wannstedt and his wife, the coach of the Pittsburgh University football team, donated $250,000 recently to the school's athletic program. Sure, that's a lot of money... but the bigger news story is the unique fundraising campaign put together by Pitt's athletic director and development office.

To fund all 85 football scholarships permitted by the NCAA, so school estimates that it needs an endowment that generates $2.1 million annually. The answer? "Pitt Football Endowed Position and Scholarship Program."

According to an article on the College Sports TV website, "Contributors will have the unique opportunity to attach their name to one of 24 starting positions on the Panthers' team (11 offense, 11 defense and two specialists)." Wannstedt's gift will endow the position of Pitt's starting left tackle - the position he played in the early 70s.

You can argue whether there are better uses of $2.1 million annually other than providing scholarships for 85 position players on a college football team... but there is no arguement that this is a cool fundraising idea.

Minutemen leader defers to caging house

This blog has previously reported on the criticism from current and former members of Minuteman Civil Defense Corps (MCDC) regarding how the organization has accounted for over $1.6 million in donations. Jerry Seper at The Washington Times published another article this week updating his previous reports on the group's secret finances. Seper claims he was told the caging facility would answer recent questions, however instead the reporter was deflected:

Maureen E. Otis -- president of American Caging Inc. in Stafford, Texas, an agency hired to collect, deposit and disburse donations to the civilian border-patrol group -- told The Washington Times that neither MCDC President Chris Simcox nor the group's board of directors had given her permission to "disclose any numbers."

Instead, Mrs. Otis issued a statement saying only that all Minuteman donations have been "securely collected, counted and deposited" in MCDC bank accounts.

Part of the controversy stems from the donations being routed through a Virginia-based charity headed by conservative activist Alan Keyes.

In addition to MCDC, the American Caging clients include Declaration Foundation, Declaration Alliance and the Declaration Alliance Political Action Committee. It also has handled funds for Mr. Keyes' unsuccessful political campaigns, including his failed 2004 senatorial race in Illinois, for which it was paid $30,530.

American Caging also handles other clients aligned with MCDC, Mr. Keyes and the Alliance organizations, including Diener Consulting Inc., which serves as the Minuteman group's public-relations arm, as it did in Mr. Keyes' unsuccessful presidential and senatorial campaigns; and Renew America, a fundraising organization founded by Mr. Keyes that provides a link for donations to MCDC through Declaration Alliance.

Other American Caging clients include Response Unlimited, which makes mailing lists -- including the MCDC membership -- available to conservative mailers and telemarketers and has an "exclusive contract" with Declaration Foundation; and RightMarch.com, which raised $500,000 for Mr. Keyes' 2004 senatorial campaign and helps raise Minuteman donations through a link on its Web page to Declaration Alliance.

The current President of the Minutemen, Chris Simcox, continues to blame criticism on "a small handful of disgruntled people who have been terminated." However, it seems like Alan Keyes may be the one with questions to answer.

Aren't All Sweepstakes Deceptive?

Voters in Michigan this fall will be voting on whether to reinstate a ban on dove hunting. A pro-hunting coalition, Citizens for Wildlife Preservation, is trying to stop the ballot proposal and thereby keep dove hunting legal. Some have argued this front group of hunting organizations has intentionally selected its name to disguise which side of the debate it supports.

To meet its stated goal of raising $3.2 million, the group used a direct mail sweepstakes. However, on Friday Michigan's Attorney General Mike Cox announced a settlement which canceled the sweepstakes advertised by the group and "provides refunds to those who thought they were entering a raffle, not making a contribution," Cox said in a statement. The AP reports:

On its Web site, Citizens for Wildlife Conservation had featured a "Save Our Heritage Sweepstakes" that included a grand prize of 40 acres of Upper Peninsula woodlands or $20,000 in cash. Other donated prizes include a salmon fishing trip, shotguns and a pheasant hunt.

A sample copy of the entry ticket said "no purchase necessary" in small print and included the phrase "$5.00 contribution" in larger print. But other promotional materials asked people to "buy" tickets for $5, Cox said.

There is no information on how many donors purchased tickets unaware they were making a contribution to this front group for the dove hunters. However, initial complaints were filed against the sweepstakes on June 2nd by the Committee to Restore the Dove Shooting Ban with backing from The Humane Society of the United States and other groups.

UPDATE: This story ran on Friday, Aug. 18th in The Flint Journal.

Not everyone loses at poker

The World Series of Poker (WSOP) is winding its way toward the final table. The fundraising blog "Fund Raising Idea" drew our attention to an interesting story on the growing number of players who pledge a percentage of their winnings to various charities. Cardplayer.com reports the following story:

In its inaugural year [2003] at the World Series, the “Put a Bad Beat on Cancer” initiative recruited around 80 players to make the pledge, including 2003 main event winner Chris Moneymaker. Over the past few years, the concept has grown and spread throughout the poker world. The biggest-name pros and amateur players alike now pledge varying percentages of their yearly earnings, one-time fixed amount donations, and even make lifelong commitments to donate. The World Series is not the only venue to participate in this fund-raising movement, however. donations from home games, cash games and local tournaments can also be made in order to further cancer research and prevention.

The website www.badbeatoncancer.org even uses a MySpace template in order to organize participants. While linking fundraising and gambling such as church bingo and lotteries raises a host of ethical questions... you can't deny that poker is hot... and who would pass up 1% of this year's $12 first place prize?

...now this is cute.

An 11-year old girl in Halifax is about to set a record as the youngest person in Canada to raise $10,000 for MS. As a fundraiser this is impressive, but as a blogger - it's too good to ignore.

The Material Girl as Philanthropist?

It seems Madonna has found her calling. Although she hasn't ever touched foot in Africa, in a recent interview with Time Magazine, she announced her intention to provide $1 million in financing for a documentary about the plight of Malawian children. She's also met with Bill Clinton and Jeffrey Sachs about financing other housing projects for orphans.

It's true that as causes go, Madonna did not choose a difficult one to champion. African orphans--photogenic, sympathetic, innocent--are not a hard sell. (An A-list star brave enough to fight for the rights of, say, the mentally ill has yet to emerge--unless acting crazy counts as advocacy.) But she recognized, as she has so often before, an opportunity to really make an impression. "My first thing was, I'm going to call people who I know have money, and I'm going to call people who I know want to make a difference in the world," she says.

You could say Madonna has a track record for publicity stunts. But so what if it is?

Plenty of blame to share

Back in December 2001, the Children's Hospital Foundation hired the Babock Agency to manage the charity vehicle-donation program. Under the arrangement, Gregory Babock and other executives started a group called Charity Vehicle Systems. The Washington Times explains it this way:

Vehicle donation programs are common among charities, which solicit the cars and trucks, usually by touting the tax benefits. Some nonprofits then outsource the towing and selling process to private firms in exchange for a percentage of the final sale price.

However, before long Mr. Babock and Charity Vehicle Systems alerted the foundation about "possible problems" with how donations were handled. On Wednesday, a lawsuit that had been filed by the foundation back in Janaury 2005 accusing Babock of mismanaging nearly $700,000 in donations was dropped as part of a confidential settlement.

Bequest spurs soul search at Salvation Army

The website Raw Story has learned that the New York Times plans to publish an article on Friday the identity crisis within the Salvation Army as it deals with the $1.5 billion bequest left by Joan Croc.

"...the bequest, and the impression of affluence that it presents, have created fears that it will change perceptions of the organization, not only among the public but within the Salvation Army itself."

What have your trustees done today?

This is the kind of heart warming story that we're proud to feature here on Don't Tell the Donor... Tom Cook recently became a trustee for the Nature Conservancy of Michigan. Not long after that he embarked on a 460-mile hike across Michigan to raise close to $9000 for his organization. It began June 29th and will take 6 weeks to finish. Congratulations Tom! We're proud of you... but these folks seem to have you beat:

These two women are biking 1,600 from Miami to New York City to raise money for cancer.

This guy wants to raise $33,000 for biking 192 miles.

And finally, this guy is making his 54th cross country trip.

Where did the Katrina money go?

Our friends over at Charity Navigator have several great resources for identifying where the Katrina donations ended up.

I really like the lessons learned article. It's interesting hearing that their data does not support the theory that donors gave to Katrina causes in lieu of other giving - especially since I know of several lazy Development Directors that blamed the diaster for why they didn't hit their numbers.

UPDATE: Thanks to an email from one of my favorite non-lazy Development Directors, this link provides some more great research. Futhermore, Generous Giving has earned a link on the right side of this blog.

I couldn't disagree more

It's easy to take potshots at organizations that appear to spend a high percentage of fundraising revenue on overhead. Self proclaimed "watch dogs" are always whipping readers into a frenzy - much like politicians railing against government waste and taxes. As I've said before, this viewpoint is short-sighted and dangerous. The issue is much more complex.

1. Organizations use different cost allocation strategies to determine what is even considered a fundraising expense. One organization may say that the Executive Director spends 10% of her time asking people for money, so 10% of her salary should be fundraising expense. Others may not. Some may allocate half the cost of a fundraising letter to communication. Others may not.

2. Why is money spent on things other than fundraising or overhead considered more efficient? I mean, if these "watch dogs" want to really make people distrust nonprofit organizations, they should be evaluating staff productivity and office supply usage, right?

3. Most fundraisers are smart people who worry about ROI and cash flow constantly. To suggest that fundraisers laugh off criticism by saying "it costs money to make money" under estimates the strategic decisions that go on every day to make as much money for the organization in as efficient a manner as possible. Viewing a single event in isolation ignores the fact that many organizations may lose money on new donor acquisition in order to recoup that loss on subsequent renewals and follow-up solicitations.

I am all in favor of transparency. And yes, some nonprofits are not worth giving to because they waste money. But unless these "watch dogs" can dig into organization-wide financials to understand the strategic objectives of specific programs in context of broader fundraising goals... they should keep their cookie cutter metrics to themselves.