is this fundraising technique ethical?

[hydroazuanacaine]

i was in a committee meeting today and an issue came up. we are raising money for a nonprofit/ngo through an online peer-to-peer fundraiser. the campaign involves getting friends of the organization -- like board, staff, and other committee members -- to get their friends to donate. we give them success stories about the organization's work in the form of text, photos, and videos that they can send to their friends with a link that allows them to go to our online site and donate. shows up in a thermometer.

we all plan to donate during this campaign. we are going to anonymously pledge money using an online survey. we're not relying on that; after the anon pledge, we will do a real pledge. but only a nonprofit employee who also serves on the committee will ever know exactly who donated what. so then we will use that money to create a 1 for 1 match that we can utilize as a marketing tool at some point in the campaign. this money will be donated no matter what amount of money we receive. it is certain that we will raise much, much more than the committee is able to put up. this is just a tool to incentivize for a period of time during the campaign. maybe at the end. but you can use it at any point by saying, "until [campaign name] reaches $10,000 or the end of tomorrow, your contribution will be matched dollar for dollar and go twice as far!"

so the issue raised is that the donor's dollar is not actually causing another dollar to be donated. it is being paired with another dollar given in order to advertise the opportunity. ethical?

 

[alasdairm]

in a donation matching scheme, the second dollar isn't donated unless the first dollar is donated. so the person donating the first dollar is doing so on the understanding that their donation is explicitly precipitating the donation of the second dollar.

but you already donated that dollar so you're essentially using it as a credit match. i assume you're also including it in the total you advertise?

i'd say that the idea of donation matching is well understood by people who donate and, as you're not doing what they expect, you should not describe it as such. it seems deceptive to me.

alasdair

 

[hydroazuanacaine]

i realize this does not address all your points. just want to clarify on a point ...

but you already donated that dollar so you're essentially using it as a credit match.

the dollar is not donated; it's pledged. the nonprofit will not have received this money when the match is advertised. there is a promise in place. the money will be given after the match has run.

 

[alasdairm]

but you were going to donate that dollar whether somebody donated their dollar or not so it already 'counts' (for want of a better word).

again, i think the idea of a donation match is well understood and that's not really what you're doing so i don't think you should describe it as such. why not just describe what's actually happening?

alasdair

 

[alasdairm]

indeed, why not just consider your pledge as a pool of 'matching' dollars. for every dollar donated, you'll donate one of your dollars.

i suppose it's essentially the same thing so why not just do it that way?

alasdair

 

[swilow]

Hey OP, I'm going to shift this over to Second Opinion. I think it is a bit more appropriate there

P&S====>Second Opinion.

 

[hydroazuanacaine]

^thanks!

sorry if i was editing why you were trying to reply, alasdair. what i was considering saying was the match will more than likely be met because we can just extend it and a board member would eventually finish it. but that's not made certain so i don't know that it should be considered.

this is a standard in fundraising. i'm curious about people's opinions. one committee member had a problem with it, and i was surprised. i do remember feeling a little dirty first time round, but lost no sleep.

 

[swilow]

^No worries

 

[alasdairm]

...the match will more than likely be met...

it's widely understood, when you advertise a donation match, that the donation is met. period. if you have a system where the donation will "more than likely be met" but you advertise it as donation matching, i believe you are misleading people.

i don't know why you don't just tell people honestly what you're doing. this is one of these things where, relatively speaking, what you're doing is hardly the crime of the century. but if it comes out after the fact and it becomes clear you mislead people, it's a hundred times worse, not to mention easily avoided...

alasdair

 

[hydroazuanacaine]

we might not be communicating well. by "met," i mean the match will receive enough donations so that it doesn't matter that we intend to donate the entire possible match no matter what. we still are misleading people, no doubt. but we really are donating a dollar for every dollar. maybe more. if we have a match up to $5,000 and people respond by donating $4,500, we're still gonna give our $5,000 for a total of $9,500. we won't say, "well i guess we aren't giving that last $500." so like you said, their donation isn't really "explicitly precipitating" ours.

you must be able to understand why we are doing it this way, even if you don't agree. if we say we're donating $5,000 to the campaign no matter what, it's less motivation for others to donate relative to, "we're donating as much money as you donate, up to $5,000."

i believe in situational ethics and can make a solid argument for this strategy. i was just giving a chance for people to respond to an unbiased presentation. when i'm done with work today i'll be back to this thread to explain why i'm ok with giving 100% of our pooled funds even if the general public doesn't meet our match opportunity.

edit:

alright, here's why i think it's no big deal. social norms permit a certain level of deception in advertising, and i think we're within bounds. it's an inconsequential matter of behind the scenes mechanics. it's not a perfect parallel, but i'd liken it to when a convenience store marks a pack of gum up past what they want for it and then marks it 10% off to put something in bold on the shelf. the consumer is still walking out of the store with the advertised weight of candy bar for the advertised price. nonprofits need to be competitive just like for-profits. the consumer put up a dollar so that his dollar plus a dollar that was put up by a fellow supporter to incentivize that dollar would go to the organization, and that's happening. there is a minor discrepancy between the mechanics of that deal and the advertising language, but again i think it's an acceptable one. and i need something to put in bold in these emails.

this is commonplace. it's odd to decide you want to give a certain amount to a cause, and then give less. very few donors would, and big donors and the nonprofits usually know each other. pretending behind closed doors is pointless. there is a little dance out of formality. we're not giving the money until after. it won't be a secret when we do give the money. if for some inexplicable reason we decide to end the fundraiser with an open match, we'll still add our full donation to the thermometer and total. no one will feel bamboozled when they see we gave it all.

 

[alasdairm]

^ if you only wanted responses telling you that what you're doing was ok, you should have made that clear in the op

alasdair

 

[hydroazuanacaine]

you gave your opinion and i responded with mine. that's what i want. thanks! even though this was moved to SO, i'm not seeking advice.

 

[LuGoJ]

Shady as fuck. I would be pissed if I donated under the premise that my donation would be matched and wasn't. In fact, I would probably reverse the credit card charge so you would have to pay a nice little fee and I would redonate to another cause.

 

[Max Power]

Not ethical.

 

[hydroazuanacaine]

found a survey and analysis of results on the topic: http://www.benkuhn.net/matching-results

kinda. it's addressing if the practice is deceptive, not if it's ethical. though i'm sure there's a strong argument that those are one in the same. the guy got 60 responses from a convenience sample. he used hypotheticals two named nonprofits/foundations and then a friend, to see if people had different expectations for different sources.

first question was if people expected their donation to be matched. according to this survey, 2/3rds of donors think that when they donate $10 with a 1:1 match the recipient receives an extra $10 and do not believe the recipient would have received any of that extra $10 if it were not for their donation. the other 1/3 assumes the org is receiving that $10 or part of that $10 without regard to their donation. or that's the author's interpretation; seems like he does not consider that some respondents might think the other $10 isn't given on any condition. he came up with these numbers with this pair of questions ...

NSFW:

I answered this question by looking at the difference between two questions: - If you gave $10 to the charity and the match was active, how much extra money would the charity receive (compared to if you gave $0)? - If you gave $10 to the charity and the match was not active, how much extra money would the charity receive (compared to if you gave $0)?

If the difference between these was $10 or more, I coded this as believing full counterfactual validity; if it was between $0 and $10 (exclusive), partial counterfactual validity; and if $0, no counterfactual validity.

even if some of the $0 answers meant the thought there was no other $10, like alasdair said, most donors believe that a donation match will actually not be given unless they donate.

then he asks a couple of questions to see if nonprofits can avoid this issue by utilizing "challenges" instead of matches. that involved people donating hypothetical money, so ok.

then he ended with the big one ...

If I learned that funds put up for a matching campaign would be donated regardless of whether the match was fulfilled—for instance, that Good Ventures would have given $5 million to GiveDirectly even if they had raised only $4 million from the public—I would feel…

The response was a Likert scale ranging from 1 (not at all deceived) to 5 (very deceived). 21 out of 58 respondents—more than a third of the sample—answered with a 4 or 5; an additional 25 answered 2 or 3. Only 11 respondents selected “not at all deceived.”

so that question was severely flawed, which he admits. i'd say it's flawed on several levels. on top of leading, some of the respondents probably interpreted it is a rephrasing of question #1. but a little more than a third would said they would feel significantly deceived. i wish he would have included a question to check for reactions like LuGoJ. as while they're are connotations to "deceived," this question asking along the lines of, "if someone told you things were one way but they were another, how deceived would you feel?" i believe that the same question about marked off candy bars would have people, who figure, saying they felt deceived. maybe those are the 2s & 3s, and the 4s and 5s are closer to LuGoJ's sentiment.

with a convenience sample, i wonder how many of these participants worked in the nonprofit field. like those 11 who said they wouldn't feel deceived, i would think that some know that advertised matches often are not "counterfactual" because they are in nonprofit development.

givewell is against something very similar: http://blog.givewell.org/2011/12/15/why-you-shouldnt-let-donation-matching-affect-your-giving/

the evangelical council for financial accountability says no: http://www.ecfa.org/Content/TopicChallengeMatchingGifts
but not really, "If the donor wishes to make a later gift unrelated to the matching gift, it would be acceptable."

 

[Max Power]

WWDD?

i