Is Populist Fundraising for You?

Some 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.