Part 2: Thoughts on commission-based fundraising

Most donor organisations discourage commission-based fundraising, not because of the costs of campaigns or even the commissions paid to the fundraiser, but because of the hidden developmental costs to the organisation.

Firstly, since the commission-based fundraiser works in isolation of the organisation being serviced, any fundraising skills and information acquired will not be shared with the client. Your staff will learn nothing about fundraising. The valuable corporate and donor contacts the fundraiser cultivates become hercontacts, not yours. The information that the fundraiser has researched that could have enriched your database and enhanced your future fundraising remains with the fundraiser.

Secondly, many donors, especially individual small benefactors, will not like discovering that a percentage of their donation will not reach the organization.

Thirdly, the organisation has placed all its fundraising eggs in one basket. Having handed over the responsibility of fundraising , it’s effectively betting its survival on the fundraiser being able to raise the money in time.

Fourthly, and worse of all, when these fundraisers move on, organizations are compelled to seek a similar service, since they have not developed any fundraising capacity themselves. They get caught in a cycle of dependency that puts their autonomy and sustainability at grave risk.

But you don’t have any money to pay a fundraiser, you tell the donors. You don’t have the time to train and grow fundraisers on your staff. The funding crisis is happening now. You need the money now.

Don’t expect any sympathy. Expect a barrage of questions. A corporate donor represents a business and views you from that perspective. Do you have a fundraising strategy (read ‘business plan’)? Do you have a sustainability (strategic) plan? If you have a long-term sustainability plan, why have you not included fundraising? Did you not see the crisis coming? You did? Did you manage costs as your income shrunk? Did you try to expand your revenue streams? Did you diversify or were you overly reliant on one funder? If your answer to these questions is largely no, why would you think a donor would risk investing with you, and do it through an unrelated third party (= the fundraiser)?

In today’s competitive economic and funding environment, corporate donors, like their parent companies, are risk-averse. A corporate donor will only invest in developing your organisation’s infrastructure or financing your crisis if they see a comprehensive fundraising strategy in place, accountability for funds spent, independently-verified proof of outcomes and programmes that reflect a cost-effective and realistic design in a tough economic environment.

Government donors, philanthropic trusts and donor agencies want to see clean audits, active boards, frugal financial management and measurable sustainable benefits to your beneficiaries.

Individual donors want to see as close to 100% of their donation going to the beneficiaries of your work.

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