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  • 1.  Professional Fundraising

    Posted 05-25-2016 01:33 PM

    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!

    Rick Plummer
    Historic White Pine Village
    Ludington MI

  • 2.  RE: Professional Fundraising

    Posted 05-26-2016 08:19 AM
    Edited by Laura MacDonald 05-26-2016 08:21 AM

    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. 

    Laura MacDonald
    Benefactor Group, LLC
    Columbus OH

  • 3.  RE: Professional Fundraising

    Posted 05-26-2016 08:36 AM

    Amen to everything Laura said. 

    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. 

    Best of luck,


    Gina Flores Stumpf
    Senior Advancement Officer
    Smithsonian Latino Center
    Washington DC

  • 4.  RE: Professional Fundraising

    Posted 05-26-2016 09:23 AM

    I think there might be some merit to commission-based fundraising, in certain circumstances.  For one thing, we live in a profit-based society and it even intrudes into our non-profit world.  Think how many museums have been left in a shambles when the board decides that some retired business executive should be the director, and after firing all of these shiftless people who won't do what they want, and hiring more who, lo and behold, are just like the others, leaves to enjoy retirement.  The museums are generally not more profitable.  OK, off the soapbox and back to the subject.

    Many museums simply do not have the board capacity to really get out and work to raise money.  Just identifying the prospects outside of their friends, who they will not ask for money in any event, is beyond them.  Much less crafting a winning ASK strategy.  I have seen examples where a commission-based fundraising company raised $30M for a museum when their goal was $20M.  And a 10% commission is well worth it, when you consider that many "charities" will take as much as 90% or more for overhead from donors.

    David Beard
    Museum of the Gulf Coast
    Port Arthur TX

  • 5.  RE: Professional Fundraising

    Posted 05-26-2016 09:38 AM

    I echo both what Laura and Gina have noted.  Fundraising is a collaborative venture and perhaps no more so than when a significant capital campaign is underway, such as building a museum.  There is no easy way to raise money though trustees and staff may think hiring a development person accomplishes that.  Any development professionals worth their salt will not work on commission because so much of what they do depends on others, as well as circumstances over which they have no control.  The "others" are the trustees, staff and programs of a museum but also the community of actual and potential supporters.  That community can be large, small, fragmented, pinpointed, exhausted by appeals, disinterested in the cause, unaware of the cause, you-name-it.  Whether working on commission or hired as staff, it will take a new development person many months, if not a couple of years, to settle in and be even remotely successful.  Development is probably the least understood realm in the nonprofit sector.  This is apparent when boards of trustees think hiring a fundraiser will result in instantaneous income of substance, and, sadly, absolves them of fundraising responsibilities.  It sounds like your museum has done a great job of fundraising and congratulations.  (Assuming the money is actual money, not in-kind stuff that doesn't pay the utility bill, salaries, equipment purchases and maintenance or for building buildings.)  It is not uncommon for the final funds for a campaign to be the hardest to get.  Good wishes!


    Steven Miller
    Executive Director
    Boscobel House and Gardens
    Garrison NY

  • 6.  RE: Professional Fundraising

    Posted 05-27-2016 08:16 AM
    Thanks to all for your considered opinions-- much appreciated!

    Rick Plummer, Ph.D.
    Executive Director
    Mason County Historical Society
    1687 South Lakeshore Drive 49431
    Historic White Pine Village & Port of Ludington Maritime Museum
    231-852-0685 cell
    231-425-3825 office
    Where History Lives!

  • 7.  RE: Professional Fundraising

    Posted 05-27-2016 10:15 AM

    Laura and Gina's comments are thoughtful and well articulated.  I would offer another consideration in support of hiring a full time professional fundraiser: your fundraising efforts will (or should) continue even after you've completed Phase One.  You'd be well served to hire someone who could understand the history, develop relationships from the outset and who will stay in the community.  Outsourcing fundraising services seems a bit shortsighted.  The organization will continue to need someone(s) to steward your donors and to begin to cultivate them toward future gifts.

    Best of luck!

    Kelly Ritrievi JD
    Director of Development
    Salvador Dali Museum
    St. Petersburg FL