Charity’s Foot Soldiers
Modern fundraising techniques have turned us into a nation of beggars — and we’re better for it.
Come midsummer, I’m utterly exhausted by charity races. Not from running them — from the constant barrage of fundraising e-mails I get from everyone I’ve ever met. One friend ran the Boston Marathon to support a local arts organization. Another is doing a 5K walk for the National Multiple Sclerosis Society. Someone else is organizing a 10K to support the athletic programs at a high school. All good causes, but every year there’s a new race…or 10. With all those e-mail pleas, obnoxious vest-wearing college kids soliciting money on the streets, sometimes-absurd “awareness” campaigns (is anyone not aware of breast cancer at this point?), and charity ribbons glaring out from the box of every processed food product, it’s hard to avoid the do-gooding.
So after my friends e-mail me a second or third time for their latest cause, I pull out my credit card and click away anywhere from $10 to $50. I do this because I like to maintain my relationships, want my money to go to a good cause, and feel guilty that I don’t give as much to charity as I should. The size of my donation is usually commensurate with how close a friend we’re talking about, how difficult a task they’re tackling, and how worthy a cause it is. (A college roommate biking 300 miles to raise money for lung cancer research earns a bigger donation than a distant cousin doing a 5K walk to stop prairie-dog eradication.) And you know what? After I hit “donate,” I get a momentary rush of happiness. I just helped cancer research! I should do this more often!
And then I’m distracted by a funny video that pops into my inbox, and I forget all about charity until I get another desperate electronic solicitation and the cycle of annoyance/guilt/joy starts all over again.
I’ll say it: Running a marathon and raising some money doesn’t really feel charitable. Sure, our noble fundraisers are helping a (probably) worthy cause, but they also have a host of ulterior motives: getting into shape, finishing an athletic event, socializing, and scoring schwag (who doesn’t love an “I’m a good person” T-shirt?). Which is why whenever I get an e-mail asking for money to help reach the $4,000 goal for a Boston Marathon charity racer, I can’t help but think, You just want to run the marathon, but weren’t fast enough to qualify! So now I’m supposed to pay to help get you in? And anyway, do you really need a big, pricey event to do something good? Whatever happened to anonymously writing a check like a good New Englander? Mother Teresa, charity racers are not.
Before you sentence me to the fiery circles of hell, be aware that I’m not the only one who thinks this way. “More often than not, special events are not a winning proposition for charities,” says Sandra Miniutti, the CFO and vice president of marketing at nonprofit watchdog Charity Navigator. “They consume staff time and cost a lot of money.” Givers might be surprised to know that a lot of fundraising dollars never reach the charity — they’re spent on the event. “One thing that has to be kept in check is the cost of putting on the event itself,” says Daniel Borochoff, the president and founder of CharityWatch, another watchdog group. “Hopefully the people doing the race are paying for the benefits they receive, and the sponsors’ money is going to the charity.” Others are blunter. Kim Irish, who until recently was with the advocacy group Breast Cancer Action, told SmartMoney: “If walking could cure breast cancer, it would be cured by now.”
Walkathons have been around since the 1960s, when they started out as humble affairs — a couple laps around the high school track, a finish line, a jug of ice water, some sliced oranges. The man who created today’s high-end, hard-core fundraising events was Dan Pallotta, a Malden kid who graduated from Harvard and went on to work at nonprofits in California. In 1994, he convinced 478 fundraisers to bike from San Francisco to L.A. (taking a route of almost 600 miles) in order to raise money for AIDS nonprofits. An astonishing $1.4 million was generated. The next year, participants in his AIDSRide series raised $11.4 million, and it kept snowballing. A few years later, Pallotta partnered with the Avon Foundation for Women and started three-day breast cancer walks in which participants walked up to 20 miles a day before crashing at enormous tent villages for the night. By 2002 riders and walkers had raised just shy of $200 million through the AIDSRides and $323 million through the Avon breast cancer walks. So stunning were the successes that Harvard Business School conducted a case study on Pallotta’s company, and other charities tried to adopt his tactics.
Pallotta’s genius was making the fundraisers hard for participants. “It was about doing a journey that was a metaphor for their grieving,” he says, “about honoring the people they loved in the best and most challenging way they knew how, and in the process, raising money to support the end of those problems.” If people had to struggle during training, they were also more likely to commit to the fundraising. That difficulty was also bound to open the wallets of friends, a fact confirmed by a recent study in the Journal of Behavioral Decision Making that showed that giving increases when participants tackle harder events — a phenomenon dubbed the “martyrdom effect.”
The nonprofits were grateful for Pallotta’s help at first, but that changed. It turned out that only 55 percent of the donations were going to the actual charities — the rest went to marketing, administration, event giveaways, and Pallotta’s firm, which was collecting an average of $270,000 per event by 2001. What did that mean in the real world? Only about half of the $200 million raised through the AIDSRide ended up in the bank accounts of actual charities, while the breast cancer groups received about $194 million of the $323 million raised. Critical news stories were written, and in 2001, the California AIDSRide sponsors dropped Pallotta as a production outfit. Certain they could do better for cheaper, they decided to put on their own event. One year later, Avon made a similar break. By cutting back on the marketing and giveaways, the company hoped to give more of the proceeds to charity.
Bravo, right? Pallotta may have had some good ideas, but why was he wasting so much money? Couldn’t the millions of dollars it cost to put on one of his events be better used on research? Do we really need the glitz and the T-shirts and the hats and the enormous fees?
Apparently, we do. Without Pallotta’s marketing, databases, and event-organization skills, participation in the 2003 Avon breast cancer walks dropped by 80 percent. The net amount generated for the charity to make grants plummeted from $70.9 million to $11.1 million. (Pallotta, meanwhile, sued Avon for breaking its contract; an arbiter ruled in his favor on the breach of contract claim.) The AIDS races saw similar results, with net returns on donations dropping from $6.1 million to $1.6 million. In purifying the races, removing any taint of business, a whole lot less money wound up going to charity.
Learning all this left me at a loss. So I called up David Hessekiel, the president of the Run Walk Ride Fundraising Council, which advises nonprofits on holding those “a-thon” races.“There’s nothing, unfortunately, magical about fundraising,” he says. “If it were magical, we would all wake up and write checks. So if you’re able to get more people to participate in your program by providing a higher level of service and requiring them to raise more money to cover those costs, then that’s the cost of doing business.”
The whole thing still felt dirty, like people were being tricked into donating thanks to flashy marketing and events rather than being convinced to do so via appeals to their goodwill. So I started to dig into the numbers behind charitable organizations. Where, I wondered, do they actually get their money? According to the Giving USA Foundation, American charities received more than $290 billion in nongovernmental contributions in 2010, with just 5 percent of that coming from corporations. Another 14 percent came from foundations, and 8 percent from estate bequests. That left a remarkable 73 percent, or more than $211 billion, coming from individuals.
But when was the last time you woke up and decided, without prodding, “Hey, I’m going to give $100 to the Red Cross today”? My bet is never. Unless you’re a churchgoer — one of those weekly victims of loving, put-$20-in-the-basket nods from your neighbors — you’re probably motivated to give only when you’re actually asked to do so. Like, say, when a big hurricane tears through a developing country, a lot of people get hurt, Bono runs around asking people to text in contributions, and everyone — feeling a connection to humanity — donates $15 on a credit card. Or, you know, when your friends ask you to.
Which made me realize: Most charities need people to be obnoxious on their behalf. Without foot soldiers on the ground, without holding big events, a lot of nonprofits would get left behind. If not for my friend running the New York City Marathon, I likely wouldn’t have given to the Leukemia & Lymphoma Society. I also probably wouldn’t have done a cheek swab to register as a potential bone marrow donor. My entire relationship with that organization was built upon the trust I have in a friend who wanted to honor the passing of her father. She committed, sacrificed her time and body, and got the rest of us to give money.
Okay, I get it now: All that nagging is necessary. But you know, it still annoys me. Not because of what it says about the purity of charity—not anymore. No, my problem is with how the begging is done these days. Fundraising used to be personal. You had to write actual letters, or make phone calls, or knock on doors and ask people to give. Today, anyone can carpet-bomb their contacts with an e-mail, which is barely a step above buttonholing us at the checkout aisle or on the street. To those who argue that technology has made fundraising better, I disagree wholeheartedly.
So, a note to my friends: Next time you’re raising cash, ask me. On the phone or in person. Tell me why you want to do it, why it matters, where my money will go. I’ll happily donate to your cause. And not out of guilt.