Monday, October 22, 2012

The Fundraising Myth of Generosity

As a tennis coach, I am inundated with people attempting to "help me fundraise" on the off season.  (Even though I am retired, I still get emails trying to persuade me to use their service or product.)  Fundraising is as much a part of every organization and even every school class that it has become as commonplace as asking for school supplies.
Let's get right down to it.  It is an attempt at getting someone else to pay for what they want.  The football team wants special carriers for their individual waters that are not included in the budget, the basketball team wants windproof sweatpants because the uniforms are no longer fashionable.  Etc, etc. The list goes on and on.
Despite my opinion on the urgency or value of their "needs" they clearly are "needs" for someone.  The coaches, teachers and parents encourage their children to sell products in an effort to fundraise. We've all seen the cookie dough, pizzas, discount cards that the groups offer.  It goes something like this. Group members attempt to see their products for a $10 - $25 fee.  The purchaser gets something in return for their $$ (erroneously called a donation) and the seller gets a very small percent of the sale.  The organization that puts out the cards and products promises various percentage points and claim it to be a win-win situation.

Now, we can dispute or discuss the value of various fundraising causes.  No one can say that cancer fundraisers are for a bad cause, but how much do we know about the actual fundraiser?  We are assuming that each time we agree to add $1 to our grocery bill that our money is actually going to that charity.

And then there are the faux-charitable situations that are anything but benevolent.  Charity at it's most pure is a generous action or donations to aid to the poor, homeless, ill or helpless ( This is entirely different from a fundraiser, even though the two are used interchangeably.
A fundraiser is a gathering held for the solicitation of funds or pledges. This is an entirely different situation from a charity.
I object to using the terms interchangeably.

Our local health club had a Cancer Fundraiser.  They advertised for weeks in advance in local papers.  On the day of the Cancer Fundraiser, they had an exercise class that was open to the public for $10 per person.  All proceeds were given to their particular Cancer Charity.  Over twenty people attended and they raised $220.
The health club ran a fundraiser and agreed to give away all the proceeds.  The club generously thanked the people who attended for their donation.
In reality, the only people that made a donation was the health club who generously donated their space, water and music for the class.  The attendees got something in turn for their $10, making me feel that it was not a donation, but a transaction.
(It is my understanding that the 3 instructors also donated their services and time, so I would consider their actions a donation.)

I understand that people blur the lines and don't care where the money comes from as long as it goes to a good cause.  I am not disputing the "goodness" of the cause.  But, I do argue that ethically speaking, giving $10 in exchange for a exercise class is not the same thing as giving $10 for a cause and expecting nothing in return. (I object to the people pay $10 for the class and then parade around as if they are truly benevolent supporters of cancer research.)

I understand that people who run fundraisers work hard to entice people into spending money for their cause.  This is why we hear of various fundraisers that come up with new and exciting things for the attendees to do.
When I was on a local Board of Directors, the organization had a Fall Fling. A musician was hired to entertain the guests, the restaurant agreed to prepare food and provide servers at a minimal cost. Ticket prices were $45 per person.  It cost the organization $39.75 per person.
There was an auction where local businesses donated items which raised $15,000 that night.
The guests each thought that their $45 contribution for dinner profited the organization.  They would have been SHOCKED to learn that of their $45 ticket price, only $5.05 went to the organization.

The organization determined that in order to have a successful auction, they needed to have the fundraiser at a specific venue.  The ethical problem for me, was that the donors were under the assumption that their $45 ticket fee was going to the organization and not the restaurant.
(On a related note, the person in charge of booking the venue was friends with the manager and didn't seek out other options.  So, it was questionable if the $39.75 price was in fact, competitive.)
But, either way, the ticket price, while billed as a "donation" to the organization was not in fact, a donation.  It was a fee.  The attendees got something in return for the $45  (dinner, dancing and the auction).

(There are also ethical issues surrounding fundraisers where organizations get reimbursed or paid for their time and efforts.  This is a huge issue and a topic for another discussion.)

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