Stanford Social Innovation Review

This is a great post! “How to cultivate donors” literature increasingly suggests that people want to make targeted donations—they want to know EXACTLY where the money is going. I suppose the disclaimers help groups like Heifer Intl cover their bases, but it’s sort of playing on the finding about donors while still getting to use the money however they want.

As a donor, I don’t like it.

»» Posted by: Kim Farris-Berg on August 23, 2007 12:08 PM

As someone who interned with Heifer International in Africa, I would like to offer another perspective in defense of The Heifer Project.  While I agree that it is important for donors to know where their money is going and to be able to fund what they see as important, shouldn’t some emphasis be placed on the needs of the recipients?  Are we going to tell AIDS orphans that they cannot have a goat (or the animal they really need) but must have 20 ducks instead because that is what donors in the US have purchased.  I think it should be up to the organization, and especially the country organizations to determine what people in that country need most.  If the Vets and community development specialists at Heifer Tanzania say that goats are best, I hope US donors will be OK with their duck donation buying goats for the AIDS orphans instead of Ducks.  Donors may want to consider funding an organization like Heifer because they think the work they are doing is first-rate, and let the experts at the organization decide how to best spend the funds.  If you aren’t satisfied with the outcomes, there is always another organization to fund.

»» Posted by: Erin Brandt on August 23, 2007 12:59 PM

I don’t mind that apparently deceptive advertising so much.  I think the catalog is a great way to draw new donors into the work of the organization.  Heifer is an obvious example here.  they drew me in several years ago - and i bought a chicken or something.  Now i know i probably paid some overhead and for a chicken wing and a sapling. 

Learning that I am not actually buying a chicken with my $25 does not deter me becauise I believe strongly in the work of Heifer.  And I know I don’t have a clue how many goats would be required to improve an isolated Mexican village. 

I think dedicated donors will continue to give to a cause even after they learn that their goat turned into 5 chickens.  Sadly, nonprofits are always underbudgeted and the needs are too great.  If a gimic like this one puts a greater % of donor income/wealth into the 3rd sector, then I think it is a net benefit to this sector. 

I understand the frustrations with this sort of advertising, and i think the disclaimers should be more prevalent. 

For the record, I work at a nonprofit that doesn’t do this sort of advertising, and I likely would choose to not do it if given the opportunity to raise extra funds this way.  There is clearly an ethical line that is being approached, but in the case of Heifer, I don’t think that line is being crossed.

»» Posted by: Ryan Brooks on August 23, 2007 01:32 PM

Interesting topic! I have been involved on the marketing side of a gift catalog for a couple of years. The catalog is Harvest of Hope, through Partners International. I do want to mention that we put a great deal of thought and care into managing catalog giving with a premium on donor intent. We go to the point of managing much of our incoming gift certificates manually, in order to track every single designation which is no small feat. Our approach is somewhat similar to World Vision’s. We have determined to be guided by donor intent and to use ethical communication across all of our marketing material. For the most part, funds raised are distributed to provide the products the donor intended through their catalog giving. We do include a disclaimer in the catalog, to ensure that if a specific item is overfunded, we have the freedom to use the best judgement possible, from an ethical framework, to transfer funds to another needed item. In the infrequent times when this occurs, we go to great lengths to make a transfer that is like-for-like . If a project is a livestock project, then we would seek to transfer the funds to an income generating livestock project. If the funds provide transportation, such as boats for people in Southeast Asia, and our donors have generously supported all the boats that can possibly be used in one year, we will transfer the funds to something like motorbikes.  Honestly, for us, cases of overfunded projects are rare, and when this occurs we have often personally contacted the donor to discuss the transfer, even though we write a disclaimer on the catalog. I do believe the greater issue is that many of us as nonprofits have lost the privilege of donor trust. On the rare occassions when we transfer funds, I would hope our resource partners would have enough confidence in us to appreciate our oversight of work on the field, and the fact that our staff have a grip on the status of all of our gifts and where resources might best be allocated to meet the most pressing needs. Clearly the issue is that we have, in many cases, lost trust. There is a new book is out on the topic of catalog giving this year. The author, Kay Strom, traveled internationally to interview receipients of gifts from catalogs. She went to several countries interviewing recipients of gifts through our organization, World Vision and several other agencies. I believe Ms. Strom provides thoughtful insight on what works well in catalog giving, and offers information on steps a donor can take to increase confidence when making such gifts.

»» Posted by: Kathleen Delph on August 23, 2007 01:36 PM

The purchase of a duck (or a cow) or any other specified purpose is a restricted gift. A restricted gift is NOT a general operating grant. Auditors and the IRS also differentiate how such funds are accounted for. As a Program Officer at a Private Foundation I would be unlikely to pursue funding any organization that provided a disclaimer noting that the purposes for which a restricted gift was granted could be over-ridden by the staff and applied as though it had been granted in an unrestricted fashion for general operating support (e.g “Your alumni gift for the Stanford Business School is greatly appreciated, but if we feel it could be better used to support a new course on Biblical Hebrew and Aramaic we will feel free to divert your funds.") We make both general operating and restricted grants, and are explicit about our intent as philanthropic donors in making them.  Our grant letters include language allowing us to rescind any grant not employed for the specific purpose for which it was granted. As a private donor, if I like an organization enough to wish to provide unrestricted general operating support, that option is always available. But I would NOT provide a restricted gift to an organization that solicits it as such and then, in effect, tells me in the small print that all grants are actually unrestricted despite how the donations are solicited and despite explicit donor intent in providing the funds.  This discussion is not terribly important to someone who wishes to generically support an organization with an unrestricted general operating grant. But for those who explicitly choose to pursue targeted giving, I think it would be reasonable to consider a fundraising strategy that pro-actively solicits restricted gifts without honoring donor intent to be akin to the “bait and switch” tactics used by some merchants to bring traffic into their stores. But a visit to the DonorsChoose.org website should make it eminently clear that modern technology allows for the creation of a viable and efficient market in virtually any philanthropic domain that enables a nonprofit to match donor interests with needed projects. The mediation of a professional staff that can re-route one’s restricted gift to general operating support may be commonplace at some non-profits, but that will likely be an increasingly foolish fundraising strategy as all the directional trends show that both private and organizational philanthropy is growing increasingly targeted.

»» Posted by: Anonymous on August 24, 2007 05:39 PM

I love gift catalogs from groups like Heifer, and I use them all the time for birthdays and Christmas.  I know very well that my $15 donation doesn’t buy a living, quacking duck, and most likely my friends and relatives do, too.  In fact, I don’t think I’d have nearly as much faith in an organization that depended on me and my gift list to determine where it should invest its money.  I give to places like Heifter because they are the experts.  They know how my $15 donation can make the most impact in the lives of the people around the world their work serves.  And in the process, my mom feels good that that she got a “duck” for someone in need rather than another scarf for her birthday.

»» Posted by: Lauren Mack on August 26, 2007 12:37 PM

What a magical world we live in that typing in a few numbers on my keyboard can miraculously turn into a duck halfway around the world. Quack! Quack!

Kudos to those people doing great work around the world to get creative about how to help solve the problems that plague us as human beings.

»» Posted by: Braden Kelley on September 17, 2007 06:58 AM