Compensating Your Nonprofit Cause Marketers

Can’t We Just End the Hypocrisy?

If you’re a charity that does or wants to do cause-related marketing or sponsorship, how do you pay your cause marketers?

For those of you on the corporate side or in agencies, this probably sounds like an easy question. You pay them a base salary plus a percentage-based commission based on how much they raise. No different than paying your top salesperson. It rewards performance and punishes mediocrity. Great cause-marketers should make more money, right?

In fact, for nonprofits it’s fraught with worries, concerns, and ethical dilemmas.

Notice I didn’t say commission-based pay is illegal. So far as I know paying nonprofit fundraisers a commission is not illegal. But you can’t be a member of the prestigious Association of Fundraising Professionals (AFP) if you accept commission-based compensation. And good luck finding a grantwriter who will work on a commission basis.

Here’s why commission-based compensation is frowned upon. In the United States, some donors flat out won’t give you money to pay for overhead like salaries. A number of grant-making foundations won’t allow their money to be used for commission type pay. That's because, the argument goes, personal inurement in a nonprofit setting should always be secondary to furthering the nonprofit's mission. Donor trust can be damaged if fundraiser were commission-based or self-dealing could result.

There's no denying that commission-based pay feels unseemly in a nonprofit setting. It generates images of sales sharks in boiler rooms scamming the elderly, ala the 1992 movie Glengarry Glen Ross, depicted above.

What can you do to reward especially-effective employees? Well you can give them bonuses and perks. I don’t think even the AFP has a problem with paying higher bonuses to the fundraiser who raises more than her peers.

Let me give you an example. I worked at a marketing-driven nonprofit agency that had a bonus structure for employees who worked in sales-type positions. Meet agreed-upon fundraising goals and you received a bonus.

A colleague did a sponsorship deal worth $1 million a year over three years that was well above and beyond his established fundraising goals. The nonprofit we worked for wouldn’t pay a commission. Instead my colleague and the nonprofit negotiated a bonus that was paid out over the life of the sponsorship. Strictly speaking, there were no percentages involved and so it wasn’t a commission. But for those three years he was one of the highest-paid staffers there.

Moreover, both parties knew that if and when he did more such large-scale deals, he would get another “above and beyond” bonus. It wasn’t a commission, it was a bonus. But it was a distinction without a difference.

That’s my argument with the anti-commission folks. Top performers end up with compensation schemes that do what commissions do.

There are ways to do this without turning into the nonprofit world into Glengarry Glen Ross. And let's not forget that fraud is illegal, inside or outside of nonprofits. Ethical rules against commission-based schemes aren't exactly the last bulwark against fraud.

So why continue the hypocrisy?

Chili’s and St. Jude Children’s Research Hospital

I was in Chili’s today and I ordered their “Triple-Dipper,” a three appetizer combo. While I waited for the food, I noticed another kind of combo. Chili’s is doing a full-featured cause-related marketing campaign for St. Jude Children’s Research Hospital. There was a four-sided laminated table tent outlining the campaign on the table. When the waitress brought the drinks she slapped down Chili’s trademark square paper beverage coasters and on them was a call to action for an element of the campaign called ‘Create-A-Pepper,’ a kind of paper icon campaign. The wait staff was all attired in black shirts co-branded with Chili’s and St. Jude. The Create-A-Pepper paper icon could be found in a stack behind the hostess area. The Peppers are outlines of Chili’s iconic logo meant to be colored. I paid $1 for mine, but they would have taken $5, $10, or more. The crayons, too, were co-branded with the ‘Create-A-Pepper’ and St. Jude’s logos. There’s also creatapepper.com, a microsite, but again wi...

Part 2: How Chili's Used Cause-Related Marketing to Raise $8.2 million for St. Jude

[Bloggers Note: In this second half of this post I discuss the nuts and bolts of how Chili's motivates support from its employees and managers and how St. Jude 'activates' support from Chili's. Read the first half here.] How does St. Jude motivate support from Chili’s front line employees and management alike? They call it ‘activation’ and they do so by the following: They share stories of St. Jude patients who were sick and got better thanks to the services they received at the hospital. Two stories in particular are personal for Chili’s staff. A Chili’s bartender in El Dorado Hills, California named Jeff Eagles has a younger brother who was treated at St. Jude. In both 2005 and 2006 Eagles was the campaign’s biggest individual fundraiser. John Griffin, a manager at the Chili’s in Conway, Arkansas had an infant daughter who was treated for retinoblastoma at St. Jude. They drew on the support Doug Brooks… the president and CEO of Brinker International, Chili’s parent co...

A Clever Cause Marketing Campaign from Snickers and Feeding America

Back in August I bought this cause-marketed Snickers bar during my fourth trip of the day to Home Depot. (Is it even possible to do home repairs and take care of all your needs with just one trip to Home Depot / Lowes ?) Here’s how it works: Snickers is donating the cost of 2.5 million meals to Feeding America, the nation’s leading hunger-relief charity. On the inside of the wrapper is a code. Text that code to 45495… or enter it at snickers.com… and Snickers will donate the cost of one meal to Feeding America, up to one million additional meals. The Feeding America website says that each dollar you donate provides seven meals. So Snickers donation might be something like $500,000. But I like that Snickers quantified its donations in terms of meals made available, rather than dollars. That’s much more concrete. It doesn’t hurt that 3.5 million is a much bigger number than $500,000. I also like the way they structured the donation. By guaranteeing 2.5 million meals, the risk of a poor...

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