05 Feb
  • By Brownie Points
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An Inconvenient Truth: Nonprofit Expenditure

Most enterprises need funding to spend on two vital areas: Salaries and marketing.

Every organisation needs to compensate a competent team to drive their operations, as well as the means to get their message to the right audience. If an organisation were a car, the team is the engine, while marketing is the fuel. Without either of these the car would be immobile. The car would be unable to fulfil its purpose; its existence.

And yet, whenever I talk to the good people working at a nonprofit organisation, I always hear the same thing…

Donors want us to spend money on things that directly impact our beneficiaries. Not salaries and certainly not marketing.

Most of the nonprofit organisations rely on donations to keep operating from month-to-month. However, the majority of donors want their money to go straight to the beneficiaries. When this doesn’t happen, many donors cancel their contribution in anger.

How can we expect nonprofits to make an impact helping their beneficiaries when they cannot use their donations to market or employ competent people? To keep their engine running and keep fuelling it?

For-profit companies don’t face the same scrutiny when prioritising marketing and salary budgets. It’s a given.

Dan Palotta, an author and activist, best known for his involvement in the Breast Cancer fundraising efforts, helped rally 182,000 people to raise $582 million. In his TED talk The way we think about charity is dead wrong he explains:

“We have two rulebooks. We have one for the nonprofit sector, and one for the rest of the economic world. It’s an apartheid, and it discriminates against the nonprofit sector… the first being compensation…”

“So in the for-profit sector, the more value you produce, the more money you can make. But we don’t like nonprofits to use money to incentivize people to produce more in social service.

We have a visceral reaction to the idea that anyone would make very much money helping other people.

Interestingly, we don’t have a visceral reaction to the notion that people would make a lot of money not helping other people.

“You know, you want to make 50 million dollars selling violent video games to kids, go for it. We’ll put you on the cover of Wired magazine. But you want to make half a million dollars trying to cure kids of malaria, and you’re considered a parasite yourself.”

“The second area of discrimination is advertising and marketing.”

So we tell the for-profit sector, ‘Spend, spend, spend on advertising, until the last dollar no longer produces a penny of value.’

But we don’t like to see our donations spent on advertising in charity.

“Our attitude is, “Well, look, if you can get the advertising donated, you know, to air at four o’clock in the morning, I’m okay with that. But I don’t want my donation spent on advertising, I want it go to the needy.

As if the money invested in advertising could not bring in dramatically greater sums of money to serve the needy.

I think Dan is onto something…

Here is a simple scenario: I have R100 that I can donate to my favourite cause. This is a finite budget, and I want to use it to make as much impact as possible.

Option A: I can sponsor one child for a year.

Option B: I can sponsor a Facebook marketing campaign that brings in an exponential amount of donations i.e. my R100 can result in my favourite nonprofit getting R1 000, or even R10 000 in donations, equalling 10 children and 100 children respectively.

Which one would you choose?

Are you a nonprofit in need of some funding for marketing, or perhaps making a new part-time hire or consultant for the organisation? Test the water and set a donation goal specifically for this through your Brownie Points profile. The Brownie Points Team will support you all the way. Register for to our GROW package here, and let’s start setting ambitious donation goals together. 

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