Tuesday, April 30, 2013

Professional Fundraising and Politics

As discussed in previous posts of this blog, a surprising number of charities make use of professional fundraisers to solicit funds on their behalf.  The surprising part is that this occurs despite the fact these professional fundraisers often retain large portions of donations in the form of fees.  The end result many times is that the fundraisers actually get more of the donations than the charities get.  This phenomenon is present in advocacy and political groups as well, and extends to both ends of the political spectrum.

Take, for instance, the data collected by the New York Attorney General, whose 2012 report tracks fundraising campaigns conducted in New York that year (many of which were nationwide campaigns).  The New York report details the donations collected by professional fundraisers and the percentage of the donations that were actually received by the nonprofit.  It turns out many of these organizations are well-known advocacy groups, and inefficient use of fundraisers is all to common among them.  The following chart details the percentage of donor funds that made it to the respective nonprofit (from the most recent New York report), with left-leaning advocacy groups in blue and right-leaning advocacy groups in red.

Percentage of Donations Remitted to the Nonprofit

While those of you who are left leaning are sure to point out that less than 5% of funds raised for Tea Party Patriots, Faith and Freedom Coalition, or the Family Research Council ever made it to those organizations, those who are right-leaning are likely to find solace in the much better performance of the Heritage Foundation and quickly criticize the Brady Campaign and Human Rights Campaign (HRC) for their inefficient fundraising practices.  What should we all be taking from this?  Perhaps it is that the inefficient use of third-party fundraisers is not unique to a particular type of nonprofit or political persuasion.  All the more reason to demand better from the organizations we support, regardless of their political agenda.

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