100% to programs: a fundraising offer you should try

by guest blogger George Crankovic, Senior Writer at TrueSense Marketing.

The 100% model — the idea that 100% of funds raised will go to programs, none to overhead — attracts nonprofits as well as donors.

Charity:water is one well-known nonprofit following this course. But is it a good idea for your nonprofit? Let’s see…

First of all, if you look at it from the donor’s perspective, you have to admit that it’s a pretty compelling idea. “Every cent of my gift goes toward doing good” — not to salaries or other money-wasters like electricity and pencils. Many donors have been trained to think of overhead as bad. The media and the charity watchdogs have encouraged them to think of every penny that’s not directly funding programs is “waste.”

That’s completely wrong, of course. But trying to explain to donors why the dollars that go to overhead are just as important and impactful as those that go to programs would probably be a waste of time. Donors already have it in their heads that overhead is bad.

But if a competing organization is using the 100% model in their fundraising and you’re not, you’re probably operating at a disadvantage. You or your board might think that having another funding source for overhead shouldn’t make a difference to donors. But chances are it does.

To find out for sure, you can test it as an offer to donors. Be up front and tell donors that for this special appeal, the overhead costs are being covered by a major donor, foundation grant, or whatever the case may be, and so 100% of their gifts will do directly to programs.

A good place to test this is acquisition. New donors are most likely the ones with the greatest sensitivity to the overhead issue.

Another good place to test is with your low-dollar individual donors. They’re probably also sensitive to the whole overhead issue.

The 100% model may not be right for all donors, but for certain segments, it could be just the thing. It’s worth testing to find out.


Comments

12 responses to “100% to programs: a fundraising offer you should try”

  1. I love your blog, and always find something to take away, but I think this is wide of the mark.
    Firstly, surely once you’ve on-boarded somebody with a message of “100% of their gifts will do directly to programs” then they are more likely to expect that in the future and otherwise are less likely to give a repeat donation?
    Secondly (and perhaps more importantly), why perpetuate the myth that overheads are bad?
    General communications are the perfect place to bust this myth (newsletters, annual reviews, website…), over time, and appeals are best implemented with a stronger incentive to donate (save a life) than “we won’t waste your money on our wages this time”.
    I can’t see any reason to focus on this in an appeal beyond a (possible) very small uplift in the very short term.
    I’m normally one to advocate taking it to the test, but the potential damage of this (not just to your charity, but to the sector) seems way too big to rationalise.

  2. I love your blog, and always find something to take away, but I think this is wide of the mark.
    Firstly, surely once you’ve on-boarded somebody with a message of “100% of their gifts will do directly to programs” then they are more likely to expect that in the future and otherwise are less likely to give a repeat donation?
    Secondly (and perhaps more importantly), why perpetuate the myth that overheads are bad?
    General communications are the perfect place to bust this myth (newsletters, annual reviews, website…), over time, and appeals are best implemented with a stronger incentive to donate (save a life) than “we won’t waste your money on our wages this time”.
    I can’t see any reason to focus on this in an appeal beyond a (possible) very small uplift in the very short term.
    I’m normally one to advocate taking it to the test, but the potential damage of this (not just to your charity, but to the sector) seems way too big to rationalise.

  3. Brigit Avatar

    I’m quite frustrated by this article- way to perpetuate the myth we’re all struggling to debunk! WHY would you try to sell the idea that it’s BAD to cover overhead?!?! What, do programs magically happen without PEOPLE, BUILDINGS, & INFRASTRUCTURE? Or are you one of “those people” who think that the people who work for non-profits should all work for free, feed our children sunshine and light and the satisfaction of “helping others” last I checked, the gas company won’t take “I work for the GOOD” as payment. It’s bad enough that the vast majority of NP workers often QUALIFY for the services we’re offering- PLUS, let’s be real, the appeal of doing things that HELP lasts only so long in retaining top talent (and, quite frankly, if we could compensate workers appropriately, we would attract even more qualified people who would be able to find solutions to address the needs we’re trying to meet in more effective ways). Need I go on?!?!
    Seriously, this article is what I like to call… Horse… Poo. Please, if you’re going to call yourselves experts, do better. For us all.

  4. Brigit Avatar

    I’m quite frustrated by this article- way to perpetuate the myth we’re all struggling to debunk! WHY would you try to sell the idea that it’s BAD to cover overhead?!?! What, do programs magically happen without PEOPLE, BUILDINGS, & INFRASTRUCTURE? Or are you one of “those people” who think that the people who work for non-profits should all work for free, feed our children sunshine and light and the satisfaction of “helping others” last I checked, the gas company won’t take “I work for the GOOD” as payment. It’s bad enough that the vast majority of NP workers often QUALIFY for the services we’re offering- PLUS, let’s be real, the appeal of doing things that HELP lasts only so long in retaining top talent (and, quite frankly, if we could compensate workers appropriately, we would attract even more qualified people who would be able to find solutions to address the needs we’re trying to meet in more effective ways). Need I go on?!?!
    Seriously, this article is what I like to call… Horse… Poo. Please, if you’re going to call yourselves experts, do better. For us all.

  5. There is a way to do this without directly implicating your overhead rate and not to train your donors to expect that treatment…
    If you have a lead donor to a campaign, instead of a matching gift opportunity, you can talk about how the lead donor’s gift has covered the costs of that particular fundraising run and thus 100% can go to charity. I posted about a study showing this increased response rate, and the related overhead concerns, at https://directtodonor.com/2016/02/19/the-power-of-a-lead-gift/.

  6. There is a way to do this without directly implicating your overhead rate and not to train your donors to expect that treatment…
    If you have a lead donor to a campaign, instead of a matching gift opportunity, you can talk about how the lead donor’s gift has covered the costs of that particular fundraising run and thus 100% can go to charity. I posted about a study showing this increased response rate, and the related overhead concerns, at https://directtodonor.com/2016/02/19/the-power-of-a-lead-gift/.

  7. Cindy Avatar

    I generally enjoy reading the ideas posted in FutureFundraisingNow. Was very surprised to read this post though and as others have shared am really disappointed with what seems like a deceptive approach to fundraising that justifies bashing overhead costs. We should all be working against the myth that overhead costs need to be kept low and are bad. They are necessary costs to the organization. Nonprofits that are working hard to provide community benefit shouldn’t be required to go through the accounting gymnastics that are dictated to justify a pencil and electricity!

  8. Cindy Avatar

    I generally enjoy reading the ideas posted in FutureFundraisingNow. Was very surprised to read this post though and as others have shared am really disappointed with what seems like a deceptive approach to fundraising that justifies bashing overhead costs. We should all be working against the myth that overhead costs need to be kept low and are bad. They are necessary costs to the organization. Nonprofits that are working hard to provide community benefit shouldn’t be required to go through the accounting gymnastics that are dictated to justify a pencil and electricity!

  9. Non-Profit Unicorn Avatar
    Non-Profit Unicorn

    No, no, 1,000 times no.
    As stated above, non-profit workers need to be paid. I have tons of fabulous volunteers–but I need to coordinate them, I need to have a roof over our heads, and I need water and electricity and all the other basics to fulfill our mission. These things don’t happen by a wave of my magical unicorn horn.
    Please, stop perpetuating the idea that overhead of a hardworking charity is “waste.”

  10. Non-Profit Unicorn Avatar
    Non-Profit Unicorn

    No, no, 1,000 times no.
    As stated above, non-profit workers need to be paid. I have tons of fabulous volunteers–but I need to coordinate them, I need to have a roof over our heads, and I need water and electricity and all the other basics to fulfill our mission. These things don’t happen by a wave of my magical unicorn horn.
    Please, stop perpetuating the idea that overhead of a hardworking charity is “waste.”

  11. This article assumes that donors are morons with zero interest in how their favorite charities and causes actually work. I believe it is our duty as a sector to educate donors on the messy, hard, and complicated nature of our work to solve wicked problems. The main reason that charity:water is so successful at fundraising is because they tell incredible, visual, emotional stories that connect with donors on a visceral level. It’s not because of the 100% model. If you do not tell great stories that elicit emotions in people, and if you cannot demonstrate the results of your work, then it won’t matter how much allegedly goes to “programs” or “overhead”. No one will give you a dime.

  12. This article assumes that donors are morons with zero interest in how their favorite charities and causes actually work. I believe it is our duty as a sector to educate donors on the messy, hard, and complicated nature of our work to solve wicked problems. The main reason that charity:water is so successful at fundraising is because they tell incredible, visual, emotional stories that connect with donors on a visceral level. It’s not because of the 100% model. If you do not tell great stories that elicit emotions in people, and if you cannot demonstrate the results of your work, then it won’t matter how much allegedly goes to “programs” or “overhead”. No one will give you a dime.

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The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

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Jeff BrooksJeff Brooks has been serving the nonprofit community for more than 35 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com. More.


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The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

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Jeff Brooks has been serving the nonprofit community for more than 30 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com.

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