The other day I got an email from a local nonprofit organization announcing “an amazing opportunity.” That certainly piqued my interest – for a few seconds.
What was this amazing opportunity? Well, the email directed me to go to one of two branches of a major supermarket chain. Once there, I was to buy a special-edition reusable grocery bag. And if I did that by December 31 – voila! – the nonprofit would receive a dollar.
This is what some people refer to as a “win-win.” I’ve come to be wary whenever the phrase win-win is used. One side, it seems to me, inevitably wins more from a win-win than the other side. That’s certainly true in this case, and it’s not the nonprofit that’s doing the victory lap.
I don’t mean to sound cynical. Nor do I object to the use of reusable grocery bags. (My trunk and grocery carts are chock full of them.) But I feel the need to analyze what’s going on here and explain the utter inefficiency of this kind of arrangement.
First, we should recognize that this email essentially constitutes “an ask.” The nonprofit is asking me, as one of its supporters, to drive to a store I don’t usually patronize and buy a product I may not necessarily need, all so that the organization will benefit.
Let’s imagine that I go and buy that bag. (I won’t, but let’s pretend.) Then say that a month from now I receive a year-end solicitation letter from that same organization. That’s a second ask. In the past I have sent the organization $100 every November. This time I may say, “Oh, those guys. I already drove to East Sheboygan to buy a grocery bag for them. I don’t need to give them anything else.” Studies show that this is a common reaction – that having done one small kindness for an organization, I’m less likely to take a more obvious and helpful action later. If I indeed blow off their solicitation letter, then the organization just lost a net of $99.
Meanwhile, who actually wins? Well, of course, the supermarket, because while I was there I also bought some milk, bread, bananas, and light bulbs. I noticed their impressive cheese selection and abundant fish department. I may also be thinking of the supermarket as a more benevolent place because of the shopping bag promotion – even though I paid well more than a dollar for the bag, and even though the bag, covered with the supermarket’s logos, functions as an advertisement for the store.
Let’s further imagine that the nonprofit’s appeal is pretty successful. Let’s say that 250 people buy those bags. That’s a lot of people, but it results in only $250 for the nonprofit. And if even a handful of those bag-buyers are now less likely to make an outright gift, the nonprofit probably lost money in the process. Meanwhile, we have to keep in mind that this analysis doesn’t count the time put in by the staff flogging this enterprise.
I’ve written before about how Amazon seduces nonprofits into shilling for them through its transparently self-interested “Amazon Smile” program. I pointed out that Amazon has by many accounts engaged in unethical business practices, and that nonprofits should think twice before aligning themselves with that kind of corporation. But my criticism of Amazon Smile wasn’t about ethics as much as it was about how it’s simply not a wise use of time for the nonprofits. These kinds of partnerships return so little for the effort.
These schemes abound, not only from large corporations, but from locally-owned enterprises as well. I once was at a board meeting of an organization dealing with enormous financial pressures. The organization needed to come up with $250,000 – fast! – or risk closing down. At an emergency meeting we drew up ambitious and urgent plans to meet that enormous gap. Then, as the meeting ended, one of the board members derailed the conversation by saying that he had arranged a benefit at a local restaurant. On the following Tuesday, he explained, twenty percent of the dinner bills paid by self-identified supporters would be donated to the organization. And the board member made it clear that he very much expected all board members to take part.
So board members needing to raise $250,000 reluctantly and resentfully went to a bad restaurant so that the organization could get a $6-or-so kick-back from their dinner bill. What were the board members not doing because they were going to dinner? Perhaps they were failing to make the critical contact with donors who could write very big and important checks.
And that’s what’s overlooked when nonprofits get excited about these collaborations: the opportunity cost. What are the staff and board not doing while they are telling their donors to drive to a distant supermarket to buy special grocery bags or to eat at a particular restaurant on a Tuesday night?
Moreover, messaging gets muddled. Nonprofits put out a confusing double message by telling people not only to donate money, but to buy stuff from Amazon.
Let’s go into these partnerships with our eyes open, folks. Companies are writing fewer and fewer checks to charity, preferring to support nonprofits through these kinds of cause-related marketing schemes. Most of them involve convincing you to market the companies’ products to your donors. In so doing, you risk alienating your donors and cannibalizing their outright gifts.
Many board and staff members are drawn to these kinds of efforts because they seem like a simple ask, less risky than requesting a direct gift. Easy? Yes. Effective? No. Worth it? Almost never.
Copyright Alan Cantor 2015. All rights reserved.