It's good when bad fundraising is called out. Fundraising Agency Settles Sweeps Case with 19 States (in DM News) reports how Newport Creative Communications, a fundraising agency, has agreed to pay $400,000 in a settlement involving allegations of deceptive sweepstakes mailings:
According to several state attorneys general, Newport Creative produced direct mail sweepstakes promotions for more than 30 nonprofit organizations as fundraising devices that were sent to thousands of consumers. The states alleged that the promotions mislead consumers into believing they had won a prize.
According to the press release from the Pennsylvania attorney general, deceptive statements included:
- "Very positive news for you Mr. Smith! $6,000 cash payment to be confirmed upon reply by deadline. Payment schedule enclosed."
- "A total of $6,000 has been approved for payment."
- "Cash payment to be confirmed for Mr. Smith upon reply by deadline.
- "Mr. Smith ... I'm dumbfounded! Why haven't you claimed the $6,500 cash prize?"
- "Ms. Smith YOU ARE OUR $6,000 WINNER it's as simple as that. There are absolutely no strings attached. Just send in your $6,000 Award Claim Form and then watch your mailbox for the $6,000 prize."
A fine of $400,000 settlement (with no admission of guilt) is not nearly enough punishment for smearing our noble profession and dragging nonprofits through yet another scandal.
The question of deception is not the only problem here. This is profoundly anti-donor fundraising.
According to John Pannell, president of Newport, these mailings "get an average of 10 to 15 percent response from donors, and approximately 40 percent of those who respond send a gift."
That's an effective response rate of 4-6%. He doesn't reveal the average gift -- it's probably not something he's proud of -- but that's a great response rate, assuming this is new donor acquisition, mailed to rented names (otherwise, it really sucks!).
Whether it's deceptive or not, a sweepstakes package motivates people to give in hopes of winning a prize. (Many probably think they're improving their chance of winning by sending a gift.) It's not about the cause. It's not about a shared passion to change the world. It's just extracting cash from people.
Assuming Newport's 30-plus sweepstakes clients are worthy and above board, this is a disservice not only to their donors, but to the organizations. They're being saddled with low-loyalty donors. They're being funded by people who don't care about them. Should any nonprofit choose that path?
The coming wave of Boomer Donors will probably be much less responsive to this practice; with any luck, it will die out in the coming decades. But that's not soon enough. We need action now!
- Donors, stop giving to these irrelevant packages!
- Newport Creative, stop walking the ethical tight-rope and start doing meaningful fundraising that respects donors!
- Nonprofits seeking fundraising help, next time a snake-oil sweepstakes-peddler comes to you with exciting response rates, just say no!
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