Lars Perner, Ph.D.
Assistant Professor of Clinical Marketing
Department of Marketing, Marshall School of Business
University of Southern California
Los Angeles, CA 90089-0443
Phone: (213) 740-7127 Cell: (213) 304-17264



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Sponsored Fundraising

Non-profit groups often spend a large proportion of the money they take in on fundraising. This is problematic both because of the inefficiency of the process and the loss of potential proceeds that result and because potential donors who learn about or suspect high fundraising expenses may be less likely to donor. This is an especially critical issue now that information on fundraising overhead for different organiations is readily available on the Internet.


An alternative approach to fundraising that does not currently appear to be much in use is the idea of “sponsored” fundraising. The idea here is that some firm might volunteer to send out fundraising appeals on behalf of the organization. For example, Microsoft might volunteer to send out letters asking people to donate to American Red Cross. This may be a very cost effective method of promotion for the firm since the sponsor would benefit from both the positive publicity for its involvement and from the greater attention that would likely be given a fundraising appeal for a group of special interest than would be given to an ordinary advertisement or direct mail piece advertising the sponsor in a traditional way.


One issue that comes up is the potential match between the sponsor and sponsee organization. This may or may not be a critical issue since respondents are selected for the solicitation based on their predicted interest in the organization. Microsoft—directly or indirectly through the Bill and Melinda Gates Foundation—has been credited with a large number of charitable ventures and has the Congressional Black Caucus as one of its greatest supporters. In many cases, firms might volunteer for this fundraising effort in large part because of the spear heading efforts of high level executives whose families are affected by autism.


One major concern with his approach is receipients’ concern about privacy. Many potential donors might resent having an organizational membership list released to a third party such as Microsoft. Thus, some way of retaining recipients’ trust would be needed. Some safeguards might come up to guarantee that a firm such as Microsoft would not be able to keep the mailing list and that no human being would be able to read the information. An alternative might be that the firm would process everything expect pasting on mailing labels, a job that would be done by the sponsee organization, with staffers possibly being paid by the sponsor.