Frugal Fundraising Is Still a Good Idea

To the Editor:

Your report detailing Dan Pallotta’s latest effort “Advocate Plans 3-Day March to Raise $1-Million for a Movement Aimed at Boosting Nonprofit Power,” September 11) toward convincing the nonprofit world to adopt a spend-until-the-marginal-return-is-zero strategy raises concerns.

Having frugally led a tuition-free, charity-supported Catholic secondary school in Haiti since 1996, I shudder to think that there is a movement afoot to remove limits on the percentage a nonprofit spends on fundraising and nonprogram management. The concept is especially troublesome considering there has been no serious economic analysis of whether the practice will produce greater impact or just greater costs.

There are a lot of unanswered questions to date. For example, what if the amount of donated money in any given year is fixed? Wouldn’t spending more to raise it reduce the amount available for social programs—the actual mission of a nonprofit? Is it possible that the “incredible” results reported by groups spending with abandon are simply a result of redistribution rather than an actual increase in donated dollars overall? Without some serious number crunching, how can we know?

One thing is for sure: Mr. Pallotta’s business model would render the relationship between the input costs and output of services/social impact irrelevant. Calling for an end to the normal scrutiny of a nonprofit’s finances, he seems to suggest that as long as a good deed is being done, any amount of money spent is justified. His motto: Good at any cost!

Additionally, my many years of personal interactions with donors, both large and small, tells me that Mr. Pallotta’s idea, as it has done in the past, will cause a backlash against the industry, or will at the very least dampen the optimism that makes the U.S. one of the most generous countries in the world.

Until Mr. Pallotta provides data to the contrary, I am going to stick with the intuitively rational idea that keeping the cost of fundraising to a minimum is the best way to make sure the greatest amount of money provided by generous donors ends up in the field—not a clever promoter’s pocket.

Patrick Moynihan

President

Louverture Cleary School

Croix des Bouquets, Haiti