Events, Media & Communications

Warning: The Claim “100% of your donation goes to the cause” May (Ironically) Be Hazardous to the Greater Good

Why Companies Can & Should Help Increase Transparency and Donor Education in their Workplace Giving, Cause Marketing and Community Investment Programs
Nov 7, 2011 10:00 AM ET

Benevity Just BeCause Blog

Author: Bryan de Lottinville

“100% of your donation goes to the charity.” It’s a statement you see often, whether in a workplace giving, cause marketing or other corporate giving context. And it’s a statement that’s made proudly, seemingly conveying transparency and efficiency, inspiring goodwill toward the organization making the claim and intended to make the donor feel good (after all, when you’ve just supported a cause you care about, of course you want your money to go right to the cause). The challenge is, when you look under the hood, it’s a statement that may do more harm than Good.   

This well intended claim perpetuates the myth that there are no associated costs to acquire and process donations, or at best contributes to a continued lack of transparency and donor knowledge on the topic. Sadly, most people and companies haven’t got a clue what an appropriate fee should be for certain aspects of fundraising and processing. So let’s take a closer look and then consider why companies should help increase true transparency and make donor education part of their corporate giving programs.
 
which means that when a donation is made, although donors receive a tax receipt for 100% of their donation amount, n administrative before the funds are distributed to the cause(s).  The foundation pays a royalty for the use of our software platform out of this admin fee and in return, all aspects of processing the donations, including tax receipts, corporate matching, etc. are done on an aggregated, outsourced basis. 
 
Our philosophy underlying this pricing model is to make it inexpensive for companies to adopt our tools and allow their budget to be focused on matching and other incentives to increase the amounts raised for charity as opposed to spending on software. This helps both our business purpose and social mission and is the essence of Benevity’s hybrid or “B-Corporation” model.
 
Sometimes we hear clients say they have a desire to pay the fee so they can make the claim to their employees and customers that )  (how’s that for politically correct?). , since we’re still getting our feeRather, our reasons are aboutgreater trgreater


 
Transparency spaceThis goes foras well as virtually all
 
Here’s the thing: t’s–which extends to many, too–when it comes to understanding the reality ofgiving portal or business to consumer (B2C), what the associated costs arefundraising, transaction and s  
 
adds to anabout
 
consider the,the  (Yes they have fees; the flip side is the value they offer: the United Way, national chapters of large charities and other charity aggregators provide valuable campaign and community impact expertise and have many corporate partners with longstanding support that ultimately do great work for their communities).  
 
 Even online software that is used on charity specific sites can end up costing the causes transaction fees north of 5%. And mobile giving, where do I start…? causes do these
 
 ,,

  • I“”n in the form of seconded employeesfrom the company, an indirect rather than direct cost

  • It perverts.the to receive the funds

  • It’s chewing up budget that could be better spent incenting participation. It

 
So now that we’ve looked under the hood at some of they typical costs, what should companies do with this information?
The fact is, c ()means companies are putting their money into administration instead of leveraging their funds to incent more donations. 
 
Choosing to cover is akin to giving a cause a donation of that amount, which very well the corporation isto incent donations, which ironically may limit the overall impact Is this the best use of their philanthropic budget?
 
I was recently showing our workplace giving software to 16 large health causesand asked them’d that could lead to more dollars donated? The answer was an unequivocal: give me the matching dollars!
 
It’s really just about the math. Would I want 100% of $1.00 or 95% of $1.50?

Focusing funds on incenting more people to give easily and conveniently (through matching, promotion, contests and other innovative ideas) can increase the impact from corporate giving initiatives to new levels. (Just a note about matching in particular: it’s a huge motivator for people to give. Secondary reports cite 20% as the increase in participation from matching and some of our own implementations show this can be north of 200%!). By investing in leverage and engaging people, companies can reach and involve more people in their programs. The ultimate impact is that more people give more to more causes, which benefits all parties involved. Companies connect with more customers and employees, more people feel good about giving to causes they care about, and a greater net amount overall is contributed to more causes. Add greater transparency and donor education to the mix and you have a win-win-win for companies, causes and donors.

BENE18408

Benevity

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