The Direct Marketing Association Nonprofit Federation (DMANF) recently reviewed Pennies for Charities 2005, a just-released report from New York Attorney General Elliot Spitzer’s office that attempts to measure nonprofit efficiency based on a sample of telemarketing campaigns in the state of New York. The DMANF said it was "pleased to note that the report acknowledges there are legitimate instances where the financial efficiency of a specific campaign does not tell the full story." According to the report, in 2004, nonprofit organizations used telephone solicitations to collect $63.5 million for worthy causes in New York. Telemarketing remains a successful and efficient method for charities to raise funds and build awareness.
DMANF agreed with NY Attorney General Eliot Spitzer that it is incumbent upon nonprofit organizations to solicit bids when contracting a professional fundraiser. "However, the decision by a nonprofit to work with a professional fundraiser must be based on the specific goals and objectives, which may range from advocating, to raising funds, to building awareness, or educating the general public on important matters," DMANF added.
In many instances, DMANF continued, solicitations are made for purposes beyond just fundraising, as Attorney General Spitzer points out. And "there are reasons why some campaigns may be more financially successful than others," DMANF said.
DMANF advised that report readers should keep in mind several factors that may affect fundraising costs. For example, identifying new donors tends to be more time consuming and expensive than contacting prior contributors, but frequently necessary in order to maintain or build income. An organization may conduct a telemarketing campaign simply to test new fundraising strategies without knowing that its campaign will prove efficient and productive. An organization may also achieve goals other than raising funds – such as public education or volunteer recruitment – at the same time that it is conducting a fundraising campaign. These benefits are not necessarily reflected in the revenue received by the charity.
DMANF advises that a newly created charity or one launching new programs or ideas is likely to experience greater fundraising costs without the certainty that its campaign will prove cost effective. Report readers should also keep in mind that amounts raised in a particular telemarketing campaign may represent only a small part of a charity’s fundraising activity and, therefore, may not provide donors with a complete picture of a charity’s overall fundraising. Donors are urged to review the entire annual financial report of a charity when considering making a contribution and should not rely solely on this report when making such decisions.
For more information on the report, and the fundraising guidelines provided by DMANF in response, take a look at the DMANF press release.
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