. . . and they call her a Carnival clown*

Here’s my contribution to the September Giving Carnival conversation about the future of fundraising, hosted by Gayle Roberts

The crystal ball fell off the mantelpiece while I was dusting, so doubtless what follows will include some significant inaccuracies; but it may be that in the course of the next ten years fundraisers and agencies soliciting donations will rethink the current stance holding unethical the practice of having fundraisers compensated by a percentage of the what they raise.  Lawyers work on retainer all the time; why not fundraisers?  As with lawyers, it’s a way to give access to agencies otherwise lacking the financial wherewithal to hire professional assistance–not to mention a way to enforce productivity on the part of the professionals!  And though there’s certainly a potential for conflict of interest between the fundraiser and the client agency, mere potential has never been worth much to the positive or negative side.  If ethical people use retainers, work done on retainer will be done  ethically.  Whether or not such a change is likely, it’s one that should be contemplated and encouraged.  And it probably will be: the more nonprofits erupt like pimples on the body politic, the more demand there will be for pay-for-performance fundraising by honest practitioners.  Or, as it is written, "If raising money on commission is considered sleazy, only the sleazy will raise money on commission."  (Somehow the "If gun ownership is criminal . . ." version of this flows better).

What else?–Ten years from now people will understand that technology does not, in fact, make a fundamental difference in the amount of money donated or in who wins the money-donation sweepstakes.  Except insofar as technology can be used to tell–clearly and persuasively–the story of a nonprofit seeking support, "cyber-charity" is essentially a figment of geeks’ imagination (though certainly geeks who made lots of money can have an impact by giving it away).  The spread of information technology is very important, as was the invention of the printing press.  But would anyone really claim that charity was fundamentally reshaped because people could give alms by writing their promises to pay on printed forms?  By the same token, it may be marginally more convenient for generous people to use PayPal in their giving but that doesn’t mean the existence of donation icons will create generosity.  A little perspective here, people!

Finally, God willing and the creek don’t rise (though the latter’s unlikely, come to think of it, given global warming), the Democrats will get and stay in power long enough to restore the estate tax and increase the required foundation distribution from 5 to 7.5% (if not to 10%).  It’s amazing how public power can influence the behavior of private parties.

Of course if the Democrats do manage to regain power–and, more important, control of the public conversation about our economy’s winners and losers–we might actually return to a society in which essential public tasks are performed by public agencies and private nonprofits supplement and complement government labors instead of being expected to replace them.  And wouldn’t that be a brave new world?
* Richard Farina, Hard Lovin Loser


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4 Responses to “. . . and they call her a Carnival clown*”

  1. Sam Davis Says:

    If the estate tax is restored, my prediction is that nonprofits will get less, even with the mandatory foundation requirement.

    Estate taxes are levied against money that has already been taxed. There’s nothing more likely to make a surviving potential donor less generous than seeing Uncle Sam take even more than before to help finance such humanitarian projects as the Iraq War and keeping rich farmers from growing crops.

    Restoration of the estate tax will not be a cause for celebration for nonprofits, in my opinion, but rather a cause for a wake.

  2. Nonprofiteer Says:

    Estate taxes are no more “levied against money that has already been taxed” than are wages, which pass through the business-taxation system on their way to workers, whose pay has been reduced to cover employer taxation as well as profits. Money is fungible and doesn’t carry history as it changes hands.

    The real question about the estate tax is, Should we tax those who inherit their money as well as those who earn it? I hardly think the answer to that can be “no,” unless we regard the creation of an hereditary oligarcy as a desirable outcome in a democratic society.

  3. Tom Durso Says:

    Re percentage-based fundraising: I agree with your point in theory; the problem is when certain outside fundraisers are holding onto 70 or 80 cents out of every dollar they receive. If they’re being contracted in the first place by a nonprofit too underresourced to hire its own staff fundraisers, it’s hard for me to see that that nonprofit is getting the most for it’s money.

    And I hardly think that attorney compensation is something to be modeled by the nonprofit industry …

    Interesting post, though. Keep up the good work!

  4. Rikki Rawls Says:

    Beneficial document Thanks a whole lot

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