Ken Goldstein, MPPA

Ken Goldstein has been working in nonprofits and local government agencies from Santa Cruz, to Sacramento, and back to Silicon Valley, since 1989. He's been staff, volunteer, board member, executive director, and, since 2003, a consultant to local nonprofit organizations. For more on Ken's background, click here. If you are interested in retaining Ken's services, you may contact him at ken at

Wednesday, April 06, 2011

When is a Donation Not a Donation?

A donation that's not a donation? What's that? When it's a situation where the supporter believes they've a donation, but the nonprofit does not see it that way.

Such as, a small nonprofit puts a link to Amazon on their website, because they get a few pennies back from each book sale as part of the "associates" program. The nonprofit thinks, "We're providing a service, and getting a little extra cash." The organization's supporter thinks, "What a fun way to make my donation!" On a larger scale, it could be the logo of a national organization placed on items or the marketing of a national chain store.

Either way, the supporter is often likely to confuse the $25 spent on goods with having made a $25 donation direct to the nonprofit. I've been skeptical of these arrangements for years, and (when I was consulting) often warned my clients not to put too much effort into such arrangements. But it was just my feeling that this was happening. Now, I have a little bit of evidence.

In today's Nonprofit Quarterly online, there's an article saying that Cause Marketing Drives Down Donations. The evidence comes from a University of Michigan study:
More precisely, the study found that giving decreased if a donor had previously purchased a cause-related product, even if the donor was going to make the purchase independent of any charitable considerations. As a result of her findings, Professor Aradhna Krishna, the study's lead researcher, suggests that maybe not all giving is good giving.
There are already some criticisms of the study - small sample size, range, methodology - but I believe that further study will only bolster these results. So, does this mean you should avoid all such arrangements?

I think you can still use marketing arrangements, and sell goods, but you must do it with caution, and with eyes wide open. Make sure that the potential donation is enough to make it worth your time. Use these co-marketing deals to reach new supporters - those who haven't heard of you before and were not going to give a donation otherwise - rather than presenting these opportunities to your current donors.

Ask yourself this; is the business you're considering partnering with going to be promoting your mission to their customers, or are they expecting you to promote their products to your donors? Who does more work in the contract, and who gets more of the profits? If the balance is off, it's okay to just say "No."

I've said it before, and I'll say it again, "If you only ask for small donations, you'll only get small donations."