Jacques Mattheij

Technology, Coding and Business

Charities, Direct Marketing and Your Privacy

A recent comment on Hacker News gives a little bit of insight into how charities and non-profits determine who to target for donations and how they deal with requests for removal from marketing lists.

I’m more than a little shocked at the contents. The author, Tom van Antwerp goes into some detail about how his employer, the Ayn Rand Institute operates. (Surprising that such a bastion of capitalism isn’t able to turn a profit because of the useful services it provides for which it commands a fee, rather than to rely on donations to survive, but let’s leave that aside, there’s probably a joke in there somewhere.)

I work at a 501(c)(3), and direct mail is absolutely worthwhile. Maybe 1.5-3% of recipients 
of a prospecting piece actually respond, and they probably won't make up for the cost of 
the mailing. However, those respondents then get more mailings specifically for current 
donors and those mailings make money.

So if you respond once no matter how to a mailing from the Ayn Rand Institute, you’re targeted for more mailings. So far so good, that’s just common sense.

Out of that group, donors are checked against databases of known giving history and net worth. 

Sorry? ‘databases of known giving history’ and ‘databases of net worth’? Just the existence of such databases is a fairly substantial breach of privacy and the fact that any old non-profit with which you have no prior existing relationship should have access to them makes it a lot worse.

These databases aren't always accurate or comprehensive, but it helps fundraisers to ID 
people who might be able to give more--sometimes a lot more.

Never mind the accuracy, once you’re on one of these lists you’re going to get targeted. Now I realize that Forbes has a list of wealthy individuals but that’s quite a step away from having a list of ‘net worth’ on a substantial portion of the population. And that’s still side-stepping the question of how people end up in ‘databases with known giving history’, that means that non-profits actually sell your data to companies compiling those databases, which then happily sell them back to the rest of the non-profits so they can collectively pool their knowledge about who is known to be generous, without taking into account the fact that if someone is generous for one non-profit they might be utterly shocked at learning their data ends up with a whole pile of other non-profits that they have absolutely no relationship with.

When high-value prospects are IDed, they usually get assigned to a major gift officer 
who starts building a personal relationship to solicit very large gifts. This is where 
the charity makes the majority of its revenue. 

I would prefer the term ‘donations’ here, ‘revenue’ is in my head reserved for companies that aim to make a profit.

I usually see 95% of revenue come from the top 5% of donors, largely individuals.

The Pareto principle is alive and well, and if you are a ‘high-value prospect’ you can look forward to being assigned a ‘major gift officer’ (aka an account manager or salesperson).

If you're uninterested in receiving lots of mail, most charities will try to accommodate
that request. However, resources are limited and dealing with the problems of $XX level 
donors often takes second place to the problems of $XXX,XXX level donors. I've seen 
stacks of returned direct mail several feet high from people who moved, died, wanted 
no more mailings, you name it. It was always on the to-do list to remove those names, 
but never at the top of the to-do list.

Right, why would anybody even care about honoring the requests from people that are sick and tired of being bombarded with mail from non-profits they don’t want to give to. It’s all a-ok in the name of the ‘fight for liberty’.

The lessons in here are evident: if you give, especially to the Ayn Rand Institute but this likely holds across the board do it anonymously, lest you end up in a database with ‘prior giving history’ or be ID’d as a high value target which will result in you being assigned a extraction major gift officer. Make sure you initiate the conversation with the charities of your choice, and make sure they do not end up in a situation where they can send you direct mail because you’re likely to receive it well past you meet the grim reaper, and you really don’t want those trees to end up in stacks of returned direct mail several feet high. Maybe the Ayn Rand Institute should do a little housecleaning?