May 15, 2008

An Insider's View of Charities

Found here:
Many organizations today raise money by renting out their donor lists to companies who then sell these lists to other nonprofit organizations. That might seem a bit odd to you – why would an organization sell the names of people who support them to “competing” organizations who will then ask the same donors for money, seemingly taking away money the donor might give to the original nonprofit?

The logic? Nonprofit organizations only sell the names of their “least profitable donors.” Keep in mind that for many organizations, the average gift size of the checks they receive in the mail ranges from $12-$40. A $50 gift is therefore considered to be a substantial-sized gift, particularly if the donor makes such a gift two, three or more times each year. Accordingly, nonprofits typically only rent out the names of donors who make gifts under $50, keeping the names of the donors who make $50+ donations carefully under wraps. So if you want to limit the number of direct mail pieces in your mailbox, make fewer, but larger, gifts.

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Given that fundraising can be extremely expensive for nonprofits, help them out by making their fundraising more efficient...As much as possible, make donations by check versus credit card, as it costs an organization less money to process a check gift versus a credit card gift. A $50 gift by check might cost an organization $0.20 to process the donation, but a $50 credit card gift might cost them $1.50 to process the donation. While studies show that donors who give by credit card are typically younger and send in larger gifts, both demographic variables extremely important to organizations and therefore they gladly accept credit card gifts, keep in mind a large credit card gift of $1,000 might cost your nonprofit $30 vs. the $0.20 for a check.

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