Raising Money

Note: This post is part of our League Symposium on Charity. Here is the introductory post for the Symposium. Here is a list of all posts so far.

There are better and worse ways to raise money. When trying to raise money for a charitable cause, or when running charitable it is a good idea to be efficient. We don’t always have to be the most efficient, but when we see ourselves doing something drastically inefficient maybe we have to rethink things. Top of the list of inefficient ways to raise money is the:

1) telethon!

These kids are very talented, it’s all heart warming and all, but it is extremely inefficient and the returns can become very uncertain. When you are spending more on marketing and fundraising than you bring in, you’ve got a serious problem. Even if the all the staff at Mediacorp had decided to waive all fees, it would still be very inefficient in principle. It would be a lot of effort for what was strictly a charity show for which viewership has been decreasing*.

Next on the list is:

2) Climb for Change

So, you want to raise money for a cause and you want to source for donations. What do you do? Climb Everest! What? How’s that going to raise money? Well, various corporate donors or other random people on the internet are apparently willing to match every 10m you climb with some money. Wait, if they are interested in giving to the charity why don’t they just donate a whole lump sum to the charity? Why condition it on your performance of some arduous task? Because they’re sadists! That’s why! Maybe next they’ll ask you to drink the fat. They’ll donate a dollar for every ounce you drink!

And then we have:

3) Charity Performances

Unlike the above, this can actually be good. People come to watch a performance and they leave a big cheque for the charity at the door.** Your initial costs still run a bit high, but your ROI is still fairly good. Money spent on trips and costumes came up to about $9000 and total donations actually totalled more than $33000. People continued to send in cheques even after the performance. It is not necessarily the most efficient, but efficiency is not everything and its okay to have other goals as well, like refining your talents. And if you are going to put up a performance, dedicating it to a charitable cause kills two birds with one stone yes?

Raising Money

 

4) Flag Day (aka barely ethical child labour)

So you’re a charity in need of quick cash, what do you do? Rope in thousands of students to spend one weekend afternoon standing around in the sun with tins in their hands collecting spare change from passers by and giving out flags or stickers. Is it really voluntary? Not really when it is part of mandatory hours for community involvement.*** From the perspective of the charity, you spend very little, you don’t have to pay your “volunteers” and you get a 6 figure sum at the end of the day. Of course you can’t hold flag days too often as that just irritates people. Often each charity just does it once a year. But with the sheer number of charities, there are no shortage of weekends with students at train stations listlessly holding out their cans.

Raising Money

 5) Professional Fundraisers

What if your charitable organisation needs way more than $500 000 a year to maintain operations? Let’s turn capitalist. Let the professionals do the job. While they are more pricey than student pseudo-slaves, professional third party fund-raisers  can go out there everyday at event booths, from door to door or even on the street asking you for a long term donation ranging from $1-2 per day. The donations are made on an ongoing monthly, half yearly or annual basis and are made through the donors’ credit cards. To see how effective professionals can be, each fundraiser will average 1 long term donation a day. Each donation commits the donor to an average of $500 a year and on average****, each donor sticks around for 3 years. Not only do they collect donations, they also end up raising awareness about the charity as well. How much do they end up costing the charity? For every $1500 donated, I estimate that Appco gets about $100 – $150, which is distributed between the marketing executive, the marketing office and the main office (corporate profit). i.e. there is a total 7-10% commission. 1 person can therefore maybe raise an additional $500 000 a year (on average). This makes that 1 person 6000 times more effective than a student pseudo-slave. And this can be done every day. (or at least every working day). If there are just 30 people working for a charity, that nets that charity $15 million a year. And that just kicks ass!!

Conclusion

So, how should you raise money, it all depends on your needs and aims. Just don’t do a telethon or climb Everest for charity

*Mostly due to the increased availability of cable. All or almost all homes in Singapore are cable ready and most homes have cable. Viewership would have been higher in the bad old days when Channel 5 was the only english language channel in town.

**Yeah that is my sister and damn right I’m proud of her!!

***Students could do other things, but nothing burns up hours like spending an afternoon with a can in your hands.

****I used to work for Appco after my undergrad and before I started grad school. The numbers are calculated from what I knew that I got and what the marketing office got. The head office itself didn’t really need that large a margin as they could operate almost entirely on economies of scale.

 

Please do be so kind as to share this post.
Share

20 thoughts on “Raising Money

  1. This. I’m sick of Beg-a-thons. If you want to use a celebrity in the context of fund raising, do short public service announcements and get your celebrity involved in the good works themselves. Celebrities are not always a wise approach: they and their agents might just be in it for the publicity.

    Marathons, mountain climbing expeditions and the like, well, Sir Edmund Hillary, who spent his life helping the Sherpa people of Nepal, didn’t climb by the metre. He founded the Himalayan Trust, which did reforestation work and built schools and hospitals. Out of that came the American Himalayan Foundation. By all accounts, it’s a well-run charity with connections to the Dalai Lama.

    If you’re dealing with an overseas effort, the key is to run effective lines of communication. Do NOT depend on outsiders to run the show: you’ll end up spending money on airfare and not on welfare. Find competent local administrators and empower them to act on your behalf. Do not trust one person in that context or the money will only go into building the administrator’s house. Your best bet is to find students from that country in a university over here, integrate them into the charity then send them back. Raise funds from local businesses: a well-run charity has local roots and local accountability. The fewer overseas flights, the better.

    Professional fund raisers are not always the great evil they seem to be, though many are troublingly inefficient. Every organisation needs effective marketing: as with for-profits, marketing can efficiently be offloaded onto a third party organisation, it’s a specialised skill set. Firms of any sort waste more money on inefficient marketing than anywhere else. Many worthy charities are far too dependent on a handful of large donors: lose one such donor and your charity can go under. Worse, one very large donor can cause problems: you’re always better served to have large numbers of small donors. A professional fund raiser can help you find those many donors. And there’s the accountability issue: many 501(c)(3) organisations are ill-equipped to do the necessary reporting: non-profit accounting is completely different than anything you’ll ever see in regular accounting.

    The sovereign rule is 25%. If a charity’s overhead is higher than 25%, something’s gone terribly wrong. It may well be that charity should merge with another charity, to take advantage of their infrastructure. Be sure your charity isn’t duplicating the work of another. Above all, a charity must constantly re-evaluate its mission: I’ve done refugee work and I’ve seen how badly some camps are administered.

    One of the core problems at the heart of the Palestinian refugee crisis is the corruption and malfeasance of the UN camp administration: the reason Hamas has any credence is because they’re not as corrupt as Arafat’s PA was. Arafat stole millions from the UN. Well, he also stole a great deal of money as a bank robber in Beirut, that’s another story. Those camps have been there for sixty, almost seventy years now. The problem hasn’t been solved. It was misplaced charity: those Palestinians could have been resettled but the locals weren’t up to solving the real problem. But that opens yet another can of worms. I don’t take sides. This I will say, a refugee camp which is in operation for over ten years represents a political failure and will already be breeding its first generation of terrorists. Be sure your charity isn’t making things worse by only treating the symptoms and not the root causes.

      Quote  Link

    Report

    • Bad example. The reason the Palestinians started out in camps is that Egypt, Syria, Lebanon and Transjordan stole their land.

      The reason they’ve been kept in camps on land that was supposed to be part of the partition plan is that the pan-Arabists need a signpost, a mask through which to speak to claim legitimacy when they make claims that Israel is illegitimate.

      The pan-Arabists could have legitimately settled the “Palestinians” at any time, but they chose not to. The problem isn’t “misplaced charity”, it’s the fact that the camps are designed to operate for purposes of political fraud no matter how much money is pumped in.

        Quote  Link

      Report

      • That has nothing to do with how the UN has administered the dozens of refugee “camps”. They can’t be really called camps any more, they’re now wretched shanty towns controlled by gangs. The UN sits mildly by, allowing these people to be victimised. I told you, I don’t take sides. The Lebanese don’t even allow the Palestinians to work in their country, to the point where they’ll bring in Syrians to do the work.

        But let’s not play little games here, the people who are being driven off their land by Israeli settlements don’t have anywhere to go, either. I’m sick to death of the Blame Game in I/P politics. While it continues to be played, these people’s children are growing up to become nihilists in the Hamas model. Israel wants its land for Jews. Lebanon wants its land for the Lebanese, Syria for the Syrians, Jordan for the Jordanians. Iraq has been turned into Northern Ireland writ large and Baghdad into Belfast. The Palestinians are the most despised and rejected people upon the face of the earth and people wonder why they’re behaving the way they do. The underlying reasons for their despair have never once been seriously addressed. If the Pan-Arabists have made them into a mask through which to condemn Israel, Israel continues to evict the Palestinians from their own land as if they were a pest species.

          Quote  Link

        Report

        • The UN sits mildly by, allowing these people to be victimised.

          And why is that, exactly? The same people running the camps are voted on by a UN assembly that carries a remarkably high number of votes from tip-pot dictators and pan-Arabist theocracies. The results of these camps are the same results you got letting Kofi Annan oversee the oil-for-food regime in Iraq.

          And the conflict looks too much like this.

          What exactly is the end-game? The goal? Israel wants to be its own entity. Self-sufficient without random mortars raining down on the populace or suicide bombers blowing up innocent women and children in pizza restaurants. But what do the “Palestinians” want?

          If it was statehood, they would’ve had it by now. So if it’s not statehood, we have to ask what it is. Is it statehood at all? Is it statehood plus something else?

          I once had someone tell me Arafat’s goal wasn’t statehood. Arafat’s goal was to be the first president of a Palestinian State, and the reason his negotiations were such a mess is that anyone who made the negotiations to make a Palestinian state would never win the elections that followed, because 80% of the population would see them as traitors allied with “the Jews.”

          If you talk to the old guard of the northern PaliAuthority groups, you get a different take. Zahir Muhsein, representative to the PA from up in the northern side, described the goal as the destruction of Israel, the creation of the Palestinian State, and that the moment they had Haifa, Jaffa, Jerusalem, and a few other places claimed as a Palestinian state the anschluss with Jordan was assured.

          If you talk to Hamas you get some frightening honesty. They don’t give a crap about a Palestinian State. Talk to Mahmoud al-Zahar and you get the picture of what they want, straight from their charter and his mouth: “drive the jews into the sea in a river of blood”, “Israel is not a legitimate entity, and no amount of pressure can force us to recognize its right to exist.”

          And in diplomat circles they dance around it with orwellian newspeak. The phrase “legitimate aspirations of the palestinian people” is thrown around, but ask 10 diplomats what that means and you’ll get 20 different “nuanced answers” in as many languages. Western-leaning diplomats will tell you it’s about Palestinian statehood of some sort, the peacebrokers will tell you it’s about some sort of land-for-peace deal, the more diplomatic PA associates will throw out some fol-de-rol about “liberating Occupied Palestine”, and then Hamas and the militant wings will tell you what they really mean: genocide. And they can all use the same stupid phrase while meaning completely different things by it.

            Quote  Link

          Report

          • Oh, please. The UN don’t know how to run a refugee camp. Arafat and the other warlords stole the UN money. Both Israel and the Palestinians have been controlled and backed by their respective collection of maniacs and neither has any interest in the legitimacy of the other’s state. Israel wants to be its own entity: shall I gather that includes the right to build settlements and roads and put up barriers wherever it wants? If Hamas seeks the annihilation of Israel, Israel shows the same sentiments toward Palestinian legitimacy.

            If the Palestinians have been driven mad and now rain down mortars and rockets on Israel, the Israelis have also been driven mad: the Israelis have assumed a firebase mentality. If memory serves, Israel officially recognised the precursor to Hamas, the Mujama Al-Islamiya as a charity in 1979. They rather liked Hamas when it was fighting the PLO. But Israel had only hand-raised a snake, Sheikh Yassin was no friend of Israel.

            Israel has never really operated in its own best interests. Israel want a Jewish state, Hamas wants an Islamic state. They truly deserve each other. Both sides are a blight on the world.

              Quote  Link

            Report

            • If memory serves, Israel officially recognised the precursor to Hamas, the Mujama Al-Islamiya as a charity in 1979.

              And the strange thing was, since 1973 the MAI had actually functioned as a charity. Doing charity things.

              Wasn’t until 1984 that they were actually caught with a shipment of weapons in their mosque.

              There was no love for Hamas, ever. There was a willingness to assume that charities were trying to do good work and not just acting as mere fronts for terrorist groups. That assumption of goodwill has now dried up for good reason.

                Quote  Link

              Report

              • I’m not going to participate in this threadjacking any more. I said the UN-run refugee camps have only treated the symptom and nobody’s treated the underlying problem. When Yassin’s “charity” was fighting with Fatah, Israel didn’t take their weapons. While the US continues its “charitable” proposition of arming Israel and backing them at every turn, to the point where Israel can thumb its nose at the USA and continue building settlements, I really don’t want to hear any more of this shit about Hamas and its enmity with Israel. Israel helped create Hamas. If Hamas is now a gang of nihilistic terrorists, Israel might have come to terms with the Palestinians many decades ago instead of doing backroom deals in Oslo with bank robbers like Arafat, then backing his Islamist enemies in Hamas.

                  Quote  Link

                Report

  2. There are better and worse ways to raise money. When trying to raise money for a charitable cause, or when running charitable it is a good idea to be efficient.

    Why are you calling me a bad person? I’M HELPIIIIIINNNGGG!!!!

      Quote  Link

    Report

      • The problem with your issue with my argument is that I never set a baseline.

        I set out some boundaries for the field of play, suggested that some things were intuitively good and some were intuitively bad. I frankly admitted I couldn’t do a whole lot more than that, and that the problem needed a lot more thinking than I’d been able to give it.

        The same could easily apply to the process of raising money, I would say.

          Quote  Link

        Report

  3. Things like climbing Everest or running a marathon for charity are often not really about the charity at all. Rather people want to do these things and prefer to involve a charity because it is like giving themselves permission -I’m not wasting loads of time and money on a holiday to Nepal, I’m fundraising.

    The big problem I have with this kind of thing is many charities actually subsidise travel costs for the fundraisers out of the money you raise so donors are in effect paying for you to have a free (or cheaper) trip and only once that is paid for does the surplus go to the charity.

      Quote  Link

    Report

    • But depending on who the person is, from the charity’s side it may still be a win.

      They get (cheaper than normal speaker fees) endorsement from celebrity, celebrity convinces fans to donate via wide reaching facebook/twitter or other social or even promotional channels. So sure, they may wind up subsidizing the climb of the celebrity, but after all is said and done the charity might net double what their “normal” donation drive achieves and see it as a win.

      Just offering the other side, hard numbers probably go case by case.

        Quote  Link

      Report

      • With celebrities you may be right but I’ve known plenty of people who struggle to be recognised in their own homes get the same kind of offer. Raise a minimum sponsorship (which happens to correspond to the cost of a plane ticket and accommodation) and we’ll let you climb a mountain for our charity for ‘free’.

        I love adventure tourism but it should be called what it is.

          Quote  Link

        Report

  4. Where do the chuggers come in on this scale? Somewhere between the last two options? One of the more annoying things about SF is that the weather is temperte enough for the chuggers to be out most of the year.

    Also Movember (as much as I hate the portmandeau) is probably a more frequent variant than climb Everest.

      Quote  Link

    Report

Leave a Reply

Your email address will not be published. Required fields are marked *