Board members or others can easily offer this commission-based arrangement but ultimately the organization needs to make the ask and steward the donor. The board and staff together will best identify potential funders and a strategy to reach those prospects. Also, staff will better relay the mission of the project and ultimately are the owners of that donor relationship.
Consultants can help energize the board and staff and prioritize a winning fundraising strategy.
Original Message:
Sent: 05-26-2016 08:18 AM
From: Laura MacDonald
Subject: Professional Fundraising
Good morning, Rick.
I'm not sure that commission-based fundraising is a heated issue--in my experience, there is wide acceptance that the practice is both unethical and ineffective. See the codes of ethics of the Association of Fundraising Professionals, American Alliance of Museums, or the Giving Institute. See the Donor Bill of Rights.
Unethical because it subverts the donor's intent. Say a donor gave $50,000 for one of your new exhibits. The donor understands that the gift helps to support design and construction as well as some reasonable amount of administration (including fundraising costs.) Now tell the same donor that 10% of the gift is being siphoned off for the fundraiser's commission (or, worse yet, don't tell and the donor finds out later.) You can see how it's not a workable solution and doesn't build a strong relationship with the donor.
And its ineffective because the enterprise won't succeed if the fundraiser is the only one who is motivated to secure the gifts. Board members, key volunteers, and lead staff all must participate in building relationships, educating potential donors and -- yes -- asking for a gift. Donors are far less likely to respond to strong-arm tactic from someone they don't know. I've interacted with hundreds of donors -- I don't know any who would make a gift via a commission-paid vendor.
So it seems your options are to either hire a (staff or contract) fundraising professional and pay them a fixed amount (there can be some modest performance bonus when he/she exceeds targets), or hire a firm on a fixed fee to guid you and your volunteers through the process. Good luck -- it sounds like a worthwhile project.
Oh -- by the way -- if this is a start-up operation, you should expect that total fundraising costs (staff, consultants, travel, marketing materials, events, technology) will be on the high end of the typical campaign cost of $.10 to $.15 per dollar raised. It is common for these costs and other project costs to be included in the overall campaign goal.
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Laura MacDonald
President
Benefactor Group, LLC
Columbus OH
Original Message:
Sent: 05-25-2016 01:33 PM
From: Rick Plummer
Subject: Professional Fundraising
I am trying to get a fix on fundraising for our multi-million dollar project--the Port of Ludington Maritime Museum, in Ludington, Michigan.
We've raised $4.2 of the $5 mil we need to complete Phase One of the project and are looking to open the museum in May, 2017. We are considering hiring a professional fundraiser to finish the fundraising for the project. We are considering a commission-based fee arrangement and understand from reading about the issue that this is a heated topic--at least three professional fundraising organizations deem this to be legal yet unethical. Many non profits, however, do hire professional fundraisers on commission.
Can you please help us get our arms around this? What is typical of museums in AAM? Is there a best practice standard? If we DO hire a professional fundraiser, what is typical commission percentage?
You thoughts will be greatly appreciated!
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Rick Plummer
Director
Historic White Pine Village
Ludington MI
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