Almost seven months after The Toronto Star took credit for shutting down MADD Canada's fundraising program, the "investigative" newspaper is claiming responsibility for the fact that Sick Kids Foundation and World Vision Canada "have admitted to using a discredited fundraising technique and are moving swiftly to clean up their act."
Both charities have long told the public and the federal regulator that only flat fees were paid to fundraisers who knocked on doors. The Star investigated and found commissions or "success payments" have been paid for years.The reporter uses the term "commission" as a rhetorical device to outrage donors. The truth is - there is a difference between a flat fee and a percentage commission. In this case, we're talking about $180 per new monthly donor.
Sick Kids and World Vision now say they were duped by a fundraising company that promised it would never pay commissions.
If either charity is breaking even on its fundraising costs within 12 months - they are doing better than most. Show me a direct marketing donor acquisition program that is breaking even in less than 12 months (let alone sooner) and I'll show you a fundraiser that deserves a raise.
Both charities were using a large, British-based international company called Fundraising Initiatives Inc., which has a client list (past and present) of about 50 Canadian charities. It's not known how many are also paying commissions.
Top executives at Sick Kids and World Vision are blaming FII, saying the contract signed with the fundraiser states that doorknockers are only to be paid either a flat fee for each "presentation" at a home (in Sick Kids' case), or either hourly wages or per presentation (World Vision).
The Star found out that after FII signs its contract with a charity, it then hires subcontractors to knock on doors and pays them only for a successful donor sign-up. A source with intimate knowledge of the FII-subcontractor set-up confirmed this.
In fact, I believe the fundraisers at both Sick Kids Foundation and World Vision Canada would be extremely smart to negotiate a contract that fixes a set acquisition cost. Many fundraisers struggle with unpredictable direct mail, special events, or corporate partnership deals. A set commission per donor is a hedge against the risk
Now, I understand that both of these charities say that they agree with Imagine Canada's ethical fundraising code and that AFP also has a similar ban.
Sick Kids has signed Imagine Canada's ethical fundraising code, which bans commission fundraising. World Vision agrees with Imagine Canada's anti-commission fundraising stand but has not yet signed the code. The Association of Fundraising Professionals also has a code against commission fundraising. Sick Kids and World Vision agree with this code, and FII is a member of the fundraising association.However, I don't think it's splitting hairs to say that if the intent is to protect donors, then I would rather support a group that has managed to contain its fundraising acquisition risk, rather than give to a group that may avoid "commissions," but pays twice as much to acquire a new donor. What do you think?