Coverage of Commercial Solicitors Lacked Adequate Research

To the Editor:

Since IDC came out smelling like a rose in “Calling Solicitors to Account” (April 5), you are probably wondering why this letter. While I applaud your zeal to inform your readers about telemarketing fraud and the amount that really goes to the charity, unfortunately your lack of solid research for this article does not achieve this goal. I am sure your objective was not to shock like a tabloid, but rather to report accurately.

My first concern is that the “good guys” and the “bad guys” are not differentiated. If companies that subscribe to the fee-for-service ethical standard had been compared to those that charge on commission (a percentage of the revenue raised), you would have shown a very different picture. While all of the well-known professional societies in our field support the belief that ethical conduct and practice means no commission, it would seem that you do not see the difference.

Also of concern is your assumption that all telephone solicitation is the same. Nothing could be further from the truth. The more customized the fund-raising methodology for a charitable organization, the better the results. Just how the telephone is being used for which charities is unclear in your presentation.

In the article, companies that conduct cold calling using huge brokered lists for the purpose of donor acquisition are mixed with companies that work only with the “family” of an organization. Everyone knows that cold prospecting, whether by mail or telephone, has a lower return on investment. If you are really concerned about how much goes to the charity, all forms of cold prospecting in the fund-raising field (including direct mail) should be on your radar screen. It all boils down to what is an acceptable cost per dollar to acquire a new donor. The answer to this is better left to the research and professional organizations in our field. An interesting extension of this question is, what is the charity’s return on investment, long-term, from a donor?

Lastly, your article would have the reader believe that the nine states used for the ranking system have the same reporting standards and forms. Those of us who fill them out religiously know that state reporting standards are not uniform and, therefore, dangerous to compare.

Assuming that any group of vendors (whether they be major-gift counseling firms, direct-mail firms, special-event companies, or telephone-solicitation companies) is all the same is to assume that most of us have put little thought and effort into providing quality service that is of value to our clients. Should we assume that charitable organizations purchasing these services from reputable companies don’t know what they are doing? I do not think so.

Diane M. Carlson
Chairman
IDC
Henderson, Nev.

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To the Editor:

As a former vice president of a telemarketing firm and a current director of individual giving, responsible for a direct-response program for an international charity, I thought I had been exposed to some pretty top-notch telemarketing bashing. I was mistaken: Your cover story is a very misinformed piece on the subject.

Under the guise of objective reporting, your story does a disservice to a very effective fund-raising method and to the professionals who understand it and use it appropriately. As one of my colleagues remarked: “To think, state regulators will read this biased article and will use it to reinforce their approach to telemarketing.”

The problem with Harvy Lipman’s article is threefold:

• The data are incomplete, contain errors, and are anecdotal.
• The article portrays nonprofit managers who do not know how to use telephone fund raising as victims.
• The article perpetuates the “fallacy of percentages.”

The data in the article are sloppy, including misspellings and listing of firms that are no longer in business. The data seem to have been chosen based on states’ reporting requirements, and, as such, are anecdotal. Inferring data from this sample concludes that states that have dissimilar reporting requirements would yield the same results.

Simply put, you can make your methodology sound as fancy as you like, but listing the amount of income a telemarketing firm provides to its clients is not news, nor is it responsible.

To make the results appear objective, an attempt was made to exclude lapsed-donor campaigns from data analyses. That would be nearly impossible to determine based on state reporting forms.

In my organization’s telemarketing campaigns, for example, some lapsed segments are included with current-donor campaigns, which would skew costs upward. Monthly giving efforts would also be nearly impossible to isolate and would have a similar, negative effect on results, when, in fact, they represent solid fund raising.

In addition, according to the Direct Marketing Association, in 1998 telemarketing raised more money for nonprofit causes than did direct mail. Rather than “Calling Solicitors to Account,” I would prefer to see my peers take responsibility to learn how to manage and utilize such a powerful medium.

There are no guarantees in fund raising. Telephone fund raising is no exception. Managers who choose to use this technique should be certain they understand it, and The Chronicle missed a perfect opportunity to help them understand the medium. You also missed an opportunity to fairly portray telephone fund-raising firms.

In addition to the managers’ responsibilities, the firms do need to adhere to ethical fund-raising guidelines. Firms that do not live up to these standards should not be utilized.

The rating chart in your article promulgates the use of percentages as a way to measure firms. By using percentages as a measurement, regulators and watchdog agencies, and now trade publications, run the risk of artificially suppressing the number of contributions charities will receive.

It is very disappointing to see how The Chronicle handled this important subject. It would have been more interesting and helpful if you had focused on the role of telephone fund raising, how to utilize it, and where to go for resources on the subject.

Timothy D. Logan
Director of Individual Giving
USO World Headquarters
Washington

Editor’s Note: The Chronicle attempted to contact each telemarketing company in its listings to verify spellings and other details that appeared in the state databases. Instead of simply relying on raw percentages, The Chronicle used a statistically valid method, reviewed by an expert at Georgetown University, to ensure a fair comparison of the performance of solicitation companies.