Yesterday I was advising a friend who is Executive Director at an organization I’m very fond of. I was shocked at a recommendation she received from her fundraising agency. It went something like this… “Don’t send a summer direct mail appeal because it’s too expensive. We think direct mail works for big nonprofits, but small […]
Is Your Fundraising Agency Screwing You?
Do you know how to tell if your fundraising agency is screwing you? Are your needs and goals primary in the relationship, or is your agency acting in a way to advance their priorities above yours?
I’ve been meeting recently with organizations who, for lack of a better way to say it, have been getting screwed by their agencies. Here are some examples that you should look out for in your agency relationship too:
Organization A: Their agency recommended mailing their deceased donor file as a way to get gifts “in memory of” their dead donors. Not surprisingly, this approach doesn’t yield much in the way of revenue or engagement, AND it can be incredibly insensitive to the families of your donors. But…it does increase the mail quantity and income for the agency.
Organization B: Against the specific instruction of the nonprofit, the agency included managed major gift prospects in their mail program. And because the agency was managing the segmentation and mailing with minimal oversight or input from the nonprofit, this was entirely unknown until this organization changed agencies and their new partner uncovered this. It made their direct mail results look great, but did nothing to advance meaningful relationships with their major donors.
Organization C: This organization’s agency mailed 9-12 solicitation appeals per year to their existing donors. Six of those mailings generated ZERO net dollars for the organization. But they generated a lot of money for the fundraising agency.
Organization D: 30%+ of this organization’s donor file that are so low value that they will NEVER generate positive net revenue for the organization (sure, there may be a very small number of donors in that 30% that do generate net, but the majority will not). But the fundraising agency continues to mail these people every month, regardless of the fact that their values are so low — and they generate no net revenue for the nonprofit.
What all of these examples have in common is that they and their agencies have competing economic incentives. The nonprofits’ goals are to maximize net revenue to deliver more services to more people in need. But the fundraising agencies are compensated for every piece of mail they put in the mail stream — giving them little, if any incentive to restrict mail in any of the examples above.
Let this be a lesson and a warning — if your nonprofit’s economic incentives aren’t aligned with those of your fundraising agency, there’s a good chance you’re being done a disservice, whether intentionally or accidentally.
As 2016 comes to a close and I look to 2017, I took some time to reflect on this blog. I love helping nonprofit leaders and fundraisers more effectively lead their organizations and raise massive amounts of money to fund their causes. That’s why I host this blog and share my insights on our sector. In […]
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If you’re like the dozens of other fundraisers I know, chances are you’re pretty busy these days. But you still want to be learning and sharpening your skills too. Here’s a quick roundup of 7 of my most popular posts from the last 30 days. These posts cover employee engagement, strategic planning, donor retention, online […]