What Are You Doing with Your Donor Lists?

I used to work for a well known catalog company ten years ago.  The company had three separate catalogs at the time.  If a customer called with an order for one, I would ask if they would be interested in one of the other business lines.  Sometimes they would accept the offer, and I would arrange to send them a catalog for one or both of the businesses that were part of the company.  If they declined the offer, I would make notes on the customer’s account that they did not want additional catalogs mailed to them.

The owner of the company had a customer-centered philosophy and appreciated the rights of his customers. He never sold their information to other catalog companies.  In his eyes, they were his customers and he wanted to keep them happy by respecting their privacy.  Happy customers returned for more purchases, while unhappy customers did not.

In my fifth year with the company, the owner sold the business to a holding company who made many changes to the way things had always been done.  I started getting calls from upset customers saying they were receiving catalogs they had not done business with, and they were not just our other catalogs, but catalogs from businesses not related to the three we worked with.  Some customers said that they called the companies to find out why they were receiving the catalogs, and it turned out that the new management had started selling our customers’ information to other businesses.  Many customers were so upset by this that they not only demanded we stop sharing their information, but they also wanted us to stop sending out catalogs.  We lost customers and their business because the new owners did not respect the customers right to privacy.

I bring up this story because thousands of nonprofits will be sending out their annual year end appeals in just a matter of a few weeks.  Mailboxes around the country will soon be filled with envelopes from organizations with a myriad of programs beseeching their recipients for money to support them financially.  The problem is that many of those requests will be mailed to people who have never had any contact with them nor supported them before.

How does this happen?  Why would an organization ask for money from someone who has no previous contact with them?  They never gave them money before, attended their events, or even visited their websites.

The answer is because those organizations bought a list of names from another organization with what I consider questionable ethics.

Nonprofits that buy donor lists at a pretty high cost hope to increase their base and bring in additional income and support, but often the requests they mail end up in the trash or recycling because they have no history with the potential donor.  The organization that sells their donors’ information can make a tidy sum for that information, but if their donors have not given their permission, and then find out that this has occurred, in most cases, they will not write another check to that organization again.

Sadly, selling donors lists is nothing new in the nonprofit sector.  It has been happening for decades, and it will probably continue for decades more, as long as nonprofits are looking for extra cash.  Every year, my parents’ mailbox, my friends’ mailboxes, as well my own, will continue to fill with solicitations from organizations that we have never supported, and every year the money invested in stamps, stationary, and various premiums that are enclosed are wasted.  Is this really worth doing?

What makes an organization think that they have the right to make additional money off their donors’ kindness by selling their personal information to businesses and other organizations?  Donors support your organization because they appreciate what your programs do, but the information they provide you as donors is private information.  They do not expect you to share their names and addresses with others.

In my opinion, organizations should discontinue this practice of purchasing donor lists from other organizations and mailing houses.  Send your appeals to those who actually are interested in what you do; those that have given you money before, people who have been  to your events, your former clients who have used your services in the past, volunteers, etc.  You will get a better return from those people than you will from people with no history or knowledge of your organization, mission, and programs.  It is also my opinion that organizations that sell their donor lists are going to lose their supporters in the end.  Betraying your donors trust by selling their names and addresses is a really bad idea.

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About greatergoodfundraising

Richard Freedlund has been active in the nonprofit sector in a number of ways, both professionally and as a volunteer. He is the founder of Greater Good Fundraising, a business that helps schools and organizations raise money for their programs while accomplishing something positive for the community. After living in Oregon for 27 years, he has returned to his hometown of Rockford, Illinois and hopes to make his mark on the nonprofit sector there. He is the father of a talented jazz musician and the son of philanthropic parents that continue to support multiple causes. To contact Richard for consulting, fundraising, or speaking opportunities, email greatergoodfundraising@gmail.com or reach him on Twitter.com @ggfundraise
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5 Responses to What Are You Doing with Your Donor Lists?

  1. Richard, you asked, “Is this really worth doing?” Well, the answer for many nonprofits is, “Yes.” If an organization wants to significantly expand its donor base, it will often not have a choice. It will have to go beyond its existing relationships. When it does choose to rent or exchange names, organizations will generally choose to rent or swap the names that will have some affinity with the cause. I’ve seen this work most effectively with membership and ticket marketing for nonprofits. However, it’s also done successfully for fundraising as well.

    So, if it works (and I believe it can, though not always), should a nonprofit rent or swap names? Is it ethical? Let’s look at what the AFP CODE OF ETHICAL PRINCIPLES AND STANDARDS has to say:

    “AFP members both individual and business aspire to: value the privacy, freedom of choice and interests of all those affected by their actions.”

    “Members shall give donors and clients the opportunity to have their names removed from lists that are sold to, rented to or exchanged with other organizations.”

    From an ethical perspective, nonprofit organizations are permitted to rent or exchange names. However, donors must be given the opportunity to opt-out of such activities.

    If a nonprofit organizational wants to rent or exchange names, it should do so with an abundance of caution and adherence to the AFP CODE OF ETHICAL PRINCIPLES.

    • Michael,
      Thanks for your comment. As always, I appreciate it.

      While buying a donor list from another organization is not uncommon, and it can help an organization bring in a percentage of new supporters, I still question the ethics of the organization that sold it. I have yet to come across a donation form that informs a donor ahead of time that their information may be sold/rented/exchanged with another organization or business. They might have a link hidden in an inconspicuous place on their website for this information or even an opt out form, but rarely does one find it without searching for some time. This was the case of the new owner of the catalog company where I worked. Donors, like my former customers, do not like finding out that their information was shared or sold without their explicit permission. The AFP code may allow it, but they should discourage it.

  2. Personally, I don’t like it. I won’t sell or trade my donor lists. Audience lists (ticket buyers) I don’t feel the same way about.

    I can almost tell which list my mail is coming from – does it misspell my name or my husband’s? Does it list us with the same last name? (We don’t share one). Do they address me as “Mrs.” (never been one)… So much for starting off on a personal basis. Right into the recycling bin they go!

    • Mary,
      Thanks for your input. As always, I appreciate it.

      Many people put a “marker” in their donor information when filling out forms to see if their information is being sold, then act appropriately. As Michael pointed out in our Twitter conversation, many of these organizations that buy and sell their donor lists have a pretty high attrition rate because they don’t appreciate having their information shared.

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