Equal Rights for Fundraising

Fundraising is the black sheep of the nonprofit sector. Charities spend as little as they possibly can on it. They talk as much as they possibly can about how little they spend on it. The watchdogs, the IRS, and donors deduct goody-two-shoes points from nonprofits in direct correlation to every dollar they spend on it. Institutional funders penalize charities for spending on it; it’s a cannibal that eats program dollars. By extension, fundraisers are the black sheep of the sector’s workforce; second-class citizens to the program staff who are in the trenches every day doing the real work of social change.

This is ass-backwards. Without fundraising there are no programs. The less we spend on it the less money there is for programs. George Overholser, founder of the Nonprofit Finance Fund, said to me that we should “de-criminalize fundraising.” I had never heard it put so accurately, either in terms of the way we treat it or what we should do about it. I would go a step further. We should make fundraising a program domain in and of itself — every bit as important as the medical research, social services, advocacy, and everything else it makes possible. We should consider all spending on it to be a critical “program” expense. Instead of disdaining it, we should invest in understanding and developing it, because unless we do, we’ll never have anywhere near the money we need to address the massive social problems we confront.

Fundraising is the front line of civic engagement. Investment in fundraising is investment in understanding social behavior, generosity, altruism, the reasons people give and don’t give, why they give to some causes and not others, and what would make them give more. To understand fundraising is to understand what inspires people and what doesn’t. If we want to inspire people to change the world, we would do well to remember this.

I have long advocated for equal rights for charity with the rest of the economic world. Today I am advocating for equal rights for fundraising with the rest of the charitable world. When an AIDS researcher’s experiment fails to discover a cure, her lab’s expenses on the experiment are not moved to the “overhead” side of the books. Experimentation is a process of elimination. The data is considered crucial to the ongoing effort to understand how to cure AIDS. Why should fundraising be treated any differently? When a fundraiser’s new event fails to bring in the amount of money she hoped for, valuable data is generated that will inform the future. It should not be treated as if it has no value. It is every bit as valuable as the AIDS data. Without it, there is no AIDS data.

Imagine telling an AIDS researcher that she cannot test any therapy unless it is sure to work. Yet this is exactly what we tell fundraisers; any idea you have that doesn’t work will be characterized as a liability against our administration-to-program ratio and will hurt us, and, by extension, you. I was consulting with a major NGO about a new fundraising effort that could potentially raise millions. They would not go forward with it unless they could assure themselves in advance that it would net 65 cents on the dollar in the first year. Two years later, they still haven’t made up their minds to launch it. If the fundraising effort itself were considered a program expense crucial to understanding what moves people with regard to this cause, they could report to the public that 100% of funds went to the cause, regardless of the results of the event; x% to traditional program services and y% to study giving dynamics for the cause. It’s a holistic approach. And it’s far more authentic, accurate, and honest than telling people that y% was wasted on overhead that contributed not one cent to the cause.

Fundraisers could experiment. Fundraisers could learn, the same way an AIDS researcher learns. Instead, we direct fundraisers to repeat the same methods over and over again, producing the same predictable and inadequate results. Is it any wonder that charitable giving has remained constant at about 2% of GDP ever since it’s been measured?

Institutional funders should take the lead on this. Fundraising should be every bit as prevalent on the lists of their program interests as health, human rights, and global poverty. And when they are, they won’t need to be giving program grants to health, human rights, or global poverty anymore, because the fundraising arms of the organizations they support will be able to fund them on their own.