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Is Populist Fundraising for You?

Greg Warner is CEO and Founder of MarketSmart, a revolutionary marketing software and services firm that helps nonprofits raise more for less. In 2012 Greg coined the phrase “Engagement Fundraising” to encapsulate his breakthrough fundraising formula for achieving extraordinary results. Using their own innovative strategies and technologies, MarketSmart helps fundraisers around the world zero in on the donors most ready to support their organizations and institutions with major and legacy gifts.

HiResSome fundraisers and vendors of fundraisers will say that all donors and supporters deserve the same treatment. They call for social fundraising. They tell you to expand the bottom of the pyramid. They say that fundraising is evolving from big donors to big networks. They tell you to be nice to everybody. They say that marketing to the top is actually hurting your nonprofit’s future.
Furthermore, they say that the small, concentrated piece of your donor base made up of older, richer supporters is a high risk/high reward constituency (from an investment of time and resources perspective). And finally, they say you should treat all donors equally by delivering the same communications for your major donors and your bottom-of-the-pyramid donors.
 
I call this notion “populist fundraising” and, although I can appreciate the proponents’ good intentions, I can’t appreciate their concept’s perceived merits at all.
 
Fundraising is a business. Nonprofits have missions. And the best way to achieve those missions is with smart business strategies that achieve results on behalf of your supporters and the people they aim to support.
Populist fundraising might make a fundraiser feel good because it is inclusive, cooperative, and accommodating. Also populist fundraising might make a vendor rich because the concept requires volume. Conveniently, there are more bottom-of-the-pyramid donors than top-tier donors. So, for the vendor that makes money on a per-transaction basis, it’s better to promote the populist approach.
 
But populist fundraising simply doesn’t achieve results in a cost-efficient manner— and that’s not fair to your donors, the beneficiaries of their donations, your staff, your board, or anyone else who cares about your mission.
 
Case in point, President Obama is the epitome of the populist fundraiser. That’s good because, if there is one category that, in fact, absolutely should embrace populist fundraising, it’s politics. Politicians need votes in addition to money. Therefore, politicians must engage and communicate with all types of supporters while inspiring them to give to their campaign efforts. In this slice of fundraising a populist approach is fundamental to the attainment of votes in order to win elections.
In the 2012 election, Obama’s brilliant online fundraising team emailed the 13-million person database built as a result of the 2008 presidential campaign. While your organization cannot spam people, politicians conveniently wrote themselves out of the 2003 CAN-SPAM Act citing political speech as a demonstration of free speech protected under our Constitution.
Anyway, the Obama Campaign sent more than 7,000 different types of messages by way of more than 1 billion e-mails. Add to that some 3 million telemarketing calls made in the last four days of the campaign alone. All in all, an unprecedented 4.5 million small individual contributions resulted in an astounding $233.22 million raised.
Sadly, in the murky world of campaign financing it is difficult to determine from where the rest of the money came to provide for the $1.1 billion spent to re-elect the president. But we do know that the remainder of the funds came from the Democrat party and various outsiders including $1.2 million from the University of California, $814,645 from Microsoft Corp., $801,770 from Google Inc., and $668,368 from Harvard University (just to mention a few).
Therefore, the amazing $233.22 million raised from small donations throughout the population still only provided for about 21.2% of total re-election spending. Sure that’s three times more than Mitt Romney’s $79.81 million raised from small individual contributions.
 
Yes! The populist approach did indeed raise tons of money for the Obama Campaign. But do we have any idea how much it cost to implement? No. Can you employ it cost-effectively? Probably not. Will it replace your donor base made up of older, richer supporters? No.
 
 

8 responses to “Is Populist Fundraising for You?”

  1. Greg, as usual, I agree with you 100%, overall. But then I remember one of the largest gifts I ever got for a University, from a retired cafeteria worker who I used to occasionally visit in her small apartment because she had such great stories about earlier Univ. years, that I could pass on to alumni from that era and keep them interested. She mended her underwear…but when she died, she left enough inherited stock in her bank box to endow 6 annual scholarships…. who’d a thought it? So, if time permits, the bottom of that pyramid CAN really pay off.

  2. Greg, as usual, I agree with you 100%, overall. But then I remember one of the largest gifts I ever got for a University, from a retired cafeteria worker who I used to occasionally visit in her small apartment because she had such great stories about earlier Univ. years, that I could pass on to alumni from that era and keep them interested. She mended her underwear…but when she died, she left enough inherited stock in her bank box to endow 6 annual scholarships…. who’d a thought it? So, if time permits, the bottom of that pyramid CAN really pay off.

  3. Scott Park says:

    I like the name, “Populist Fundraising”………..and while it may sound appealing, I think it is flawed in its premise.
    To paraphrase George Orwell from Animal Farm:”All donors are equal, but some are more equal than others.”
    Although I truly mean it when I say, “all gifts, regardless of size, are appreciated”
    the reality is, if you utilize engagement focused fundraising, as you have frequently advocated, and to which I wholeheartedly agree, you need to determine which donors among your constituencies are most apt to respond to the extra attention with larger gifts, because you can’t treat everyone the same.
    As Marguerite points out in her example, you may occasionally “miss” someone who should receive the extra attention, but that shouldn’t keep an organization from treating their $1000 donors differently than their $10 donors, or their $10,000 donors differently than their $100,000 or $1,000,000 donors.

  4. Scott Park says:

    I like the name, “Populist Fundraising”………..and while it may sound appealing, I think it is flawed in its premise.
    To paraphrase George Orwell from Animal Farm:”All donors are equal, but some are more equal than others.”
    Although I truly mean it when I say, “all gifts, regardless of size, are appreciated”
    the reality is, if you utilize engagement focused fundraising, as you have frequently advocated, and to which I wholeheartedly agree, you need to determine which donors among your constituencies are most apt to respond to the extra attention with larger gifts, because you can’t treat everyone the same.
    As Marguerite points out in her example, you may occasionally “miss” someone who should receive the extra attention, but that shouldn’t keep an organization from treating their $1000 donors differently than their $10 donors, or their $10,000 donors differently than their $100,000 or $1,000,000 donors.

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