Why Tournaments & “-a-thons” Are Hurting Partner Development

More and more ministries are joining the tournament/”-a-thon” craze that, like most events, require ridiculous amounts of time and attention in executing while resulting in proportionally smaller returns on the investment. It’s not just that I hate events, and I do despise event fundraising, it’s the fact that ministries engage in them for all the wrong reasons.

Golf-scrambles/-a-thons, bowl-a-thons, walk-a-thons, jump rope-a-thons, bike-a-thons, read-a-thons, skate-a-thons, dance-a-thons, swim-a-thons, and yes, even work-a-thons are all failing miserably to achieve what the tournament/a-thon companies, that keep 40% or more of what donor’s give (which just so happens to violate basic ethics in fundraising) tout as possible benefits of an organization’s fundraising efforts.

The problem is that most ministries use these events as “the medium” for fundraising rather than “a tool” to help bolster it.

I fully acknowledge that these kinds of events are a great way to involve and connect with current ministry partners as well as a donor acquisition tool with an opportunity gain exposure to people who have never heard of the ministry.  Great stuff, for sure. But if that’s where it starts and ends then don’t be surprised if every year these efforts get more taxing on staff & volunteers and the amount of money raised takes a downward spiral.

Events like these are truly all about the money while the mission of the ministry almost always comes secondary. This is where I ask Boards and ministry leaders to tell me again why they are in ministry and convince themselves that these events aren’t all about money?

Inspiritous conducted a survey of 12,700 financial partners to Christ-centered ministries in the US, where more than 54% had participated or sponsored some kind of tournament or a-thon. Here’s what we found:

  • 79% had never been asked to give directly to the ministry hosting the event;
    • among sponsors who were asked to give directly to the ministry sometime after sponsoring, 27% did;
  • 96% had assumed that the company hired to run the event was paid a flat fee and not a percentage of the money raised;
    • 100% of those said that they would not be okay with the company taking a percentage of the money raised;
  • Just 4% said that the ministry followed up with them in a meaningful way that prompted a direct contribution to the ministry.

I don’t’ know when it was that ministries-en-mass bought the lie that enticing people to give through methods that have nothing whatsoever to do with the organizational mission is a great way to enhance partner development.  Ministries wanting to make a real difference in engaging their financial partners should consider instead investing time into those who have demonstrated their love for the mission through giving of their time, talent and/or treasure. Invite them to experience or observe the ministry in action and use their circles of influence to bring in new partners that are there for the right reason.

The Deafening Silence of Ministry Boards

The Federal government requires all 501(c)[3] organizations be established by at least three directors.  The reason behind the law is to prevent a not-for-profit organization from being controlled by a single individual.

Governance is synonymous with accountability.  It reflects biblical community, where we build up one another by holding one another to a higher standard.  Accountability protects us from ourselves and keeps us from being led astray.

He who separates himself seeks his own desire, He quarrels against all sound wisdom. A fool does not delight in understanding, But only in revealing his own mind.   –Proverbs 18:1& 2

However, while the government encourages the directors (or the organization’s board) to govern, it is not required.  Ironically, most not-for-profit organizations, especially ministries, end up being controlled by one person.

Most ministry board members serve because they genuinely love the mission, vision, and application of the ministry, not to mention the Kingdom impact.  Additionally, members are often identified and recruited by the ministry’s leader so many join a board to help support, but not govern, the organization.  They can see their primary duty as supporting the leader, rather than governing the organization.

Most ministry boards go through the motions of governance, but in practice they look to the ministry’s leader (often the founder) to both lead and “govern” the organization.  These boards depend on the organization’s leader to set the agenda for board meetings and board chair’s often look to the leader to help inform and direct the discussion at meetings.

Despite their member’s best intentions, when boards abdicate governance to the ministry leader they leave both the leader and the organization vulnerable.  Left unaccountable, leaders make mistakes and are more apt to fall prey to temptation.  Unaccountable leaders exacerbate the perception that ministries are often mismanaged, because they often are.

Iron sharpens iron, So one man sharpens another. -Proverbs 27:17

Board members should consider that the best way to support the ministry leader, and the organization for which they serve, is to take governance seriously.  It will make you sharper and more effective!

Overcoming Ethical Blindspots: “Percentage Based Compensation”

In the latest edition (March/April 2012) of Advancing Philanthropy, readers were challenged to identify the ethical dilemma posed in several examples of real situations.  One of the examples was the following.

Lacking the staff to carry out a fundraising campaign that will ensure its ability to continue funding vital services for underprivileged children, a financially strapped nonprofit hires a company to handle the campaign and promises to pay it with a percentage of the money raised.

Ministries that are struggling to get by, may not see the dilemma.  There’s the misguided idea that losing 15% of a donation, for instance, is better than receiving no donations at all.  Tempting as it may be, percentage based compensation is absolutely unethical.  It doesn’t matter if the organization doing it is faith-based or not, the ethics centers around protecting the donor.  Percentage based compensation can create an inappropriate conflict of interest, one that put’s profit-motive ahead of the purpose for which the funds are being raised.  This is why the Association of Fund Raising Professionals (AFP), the Evangelical Council For Financial Accountability (ECFA), the Grant Professional Association (GPA) and the Association that Certifies Fund Raising Executives (CFRE), prohibit raising funds on a percentage basis.

However, more and more ministries today are throwing ethics aside and foolishly opening a door to temptation.  The fundraising consultation industry is being flooded by companies that can organize and run fantastic events and take as much as 50% of the “profit.”  None of the companies that do this are fund raisers, however, but profiteers working in the field of fund raising.  They take advantage of vulnerable organizations and pounce!

For a ministry with a minimal staff and little expertise in running events, the trade-off seems as if it is worth the financial sacrifice.  But they sacrifice far more than money when they engage with percentage-based “fundraisers.”  The focus narrows on financial goals that don’t end up serving the body of Christ after all!  Donor lists, that should be protected at all costs, are now in the hands of companies that can, and often do, sell those lists to for-profit-companies (like auto dealerships and jewelry manufacturers) that are looking for new customers with disposable income.

The Chronicle of Philanthropy has exposed some of these companies and followed a trail of devastating consequences.  When vendors who add to their percentage-based profit by selling vital information to other companies compromise detailed donor information, it doesn’t take long before donors get wise and trace the meddlesome solicitations back to the non-profit, and the company that they hired.  Many non-profits have lost some of their most precious financial partners this way.

Development research has found that high-capacity donors simply walk away when they learn that the organization to which they give engages in percentage-based compensation for vendors.  Major donors understand that development professionals are paid, but one would be hard-pressed to find any donor that knowingly gives a large-dollar gift to a fundraiser that is compensated on what can only be described as commission.  The trouble that it can bring can be devastating to a ministry’s reputation, which has a direct connection to the organization’s ability to keep and attract new donors.

It can impact foundation gifts too.  To help qualify grant applicants, more and more foundations today either ask questions about a non-profit’s past engagement with percentage-based fundraisers or require the organization to sign an agreement not to engage in such practices.

Your ministry does not exist to maximize profits, but make a difference in the Kingdom of God.  Every ministry should have clearly defined policies to protect the integrity of the ministry as well as the donor’s interest.