Reassuring Donors and Event Participant Fundraisers Through Transparency: Don't Be (RED)

Author: Mark Dolce on 25 January 2012 | 0 Comments

Last year, our Director of Marketing Therese Grohman told us about the (RED) campaign's successful formula in motivating donors using comparisons, such as how much life-sustaining AIDS medicine you can buy for the price of an extra shot in your Venti latte. Certainly no one would argue with (RED)'s finesse in persuading donors and partner companies, such as Starbucks, to help people in desperate need. However, the (RED) brand also serves as a cautionary tale for anyone doing good in the world: don't be opaque about your finances.

The Persuaders, LLC
If you do a Google search of The Persuaders, LLC, the company behind the (RED) campaign started by Bono (yeah, that Bono), the majority of the results involve pages questioning the motives and finances of not just The Persuaders (which has no website), but also the entire (RED) campaign. It turns out that there's no way for the average consumer to find out what percentage of the gross or net proceeds of (RED) campaign purchases goes to The Persuaders, LLC, their corporate partners, and most important, the charitable beneficiaries. (RED) will give you a grand total of money given to the beneficiary, but you really don't know what percentage that is of the total proceeds of (RED)-related purchases. So if you buy a pound of (RED)-branded coffee from Starbucks for $13.95, there's no way to know how much of that actually purchases AIDS medicine. While the Persuaders, LLC is not technically compelled to reveal what percentage of the proceeds goes where, the obfuscation of their finances only serves to engender distrust. This post by New York University's Aidwatch blog nicely details the problem with (RED)'s opacity.

The Transparency Lesson for Non-Profits
While it’s true that non-profits must make their finances and expenditures public, non-profits sometimes have similar difficulties when it comes to articulating where the money goes. Today, anyone with an internet connection can quickly ascertain the overall financial health of any non-profit organization: a few clicks and you have a yearly audit, which is also handy if you run out of Ambien. Few of your donors or your fundraising event participants will scrutinize your program and development expenses on a balance sheet before making a donation or raising money on your behalf. Yet, donor and event participant confidence can be enhanced or undercut depending on how clearly and how cleanly you discuss how those charitable dollars are put to work. For example, if the dollars raised by an event go only to research, then you really shouldn’t be discussing other services in your event eCommunication and printed materials. In addition, be clear about net proceeds and percentages. Don’t rely on a badge from a respected charity rating service on a webpage. It’s more about being proactive and developing uniform language that will address common questions about event and other event-related finances. You might even opt for something more definitive and involved, such as a "Stewardship Statement" in which you clearly state the reasons why your organization is a good steward of fundraising dollars. Whatever you do, be clear about where the money goes and how it is being used.

Mark Dolce is a Copywriter and CRM Communications Coordinator for Event 360, Inc. His past experience includes grant writing for non-profit legal services in Chicago and teaching English and Film to highly distracted suburban teens.