How to Pay 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, ala the 2010 movie Wall Street Money Never Sleeps, with Michael Douglas and Shia LeBeouf.

What can you do to reward especially-effective employees? Well you can give them bonuses and perks. So far as I know the AFP has no 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 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 with or without the percentage 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 by nonprofit fundraising associations against commission-based schemes are hardly the last bulwark against fraud.

So why continue the hypocrisy?

Batting Your Eyelashes at Prescription Drug Cause Marketing

I’m a little chary about making sweeping pronouncements, but I believe I've just seen the first cause marketing promotion in the U.S. involving a prescription drug. The drug is from Allergan and it’s called Latisse , “the first and only FDA-approved prescription treatment for inadequate or not enough eyelashes.” The medical name for this condition is hypotrichosis. Latisse is lifestyle drug the way Viagra or Propecia are. That is, no one’s going to die (except, perhaps, of embarrassment) if their erectile dysfunction or male pattern baldness or thin eyelashes go untreated. Which means the positioning for a product like Latisse is a little tricky. Allergan could have gone with the sexy route as with Viagra or Cialis and showed lovely women batting their new longer, thicker, darker eyelashes. But I’ll bet that approach didn’t test well with women. (I’m reminded of a joke about the Cialis ads from a comedian whose name I can’t recall. He said, “Hey if my erection lasts longer than ...

Cause Marketing: The All Packaging Edition

One way to activate a cause marketing campaign when the sponsor sells a physical product is on the packaging. I started my career in cause marketing on the charity side and I can tell you that back in the day we were thrilled to get a logo on pack of a consumer packaged good (CPG) or even just a mention. Since then, there’s been a welcome evolution of what sponsors are willing and able to do with their packaging in order to activate their cause sponsorships. That said, even today some sponsors don’t seem to have gotten the memo that when it comes to explaining your cause campaign, more really is more, even on something as small as a can or bottle. The savviest sponsors realize that their only guaranteed means of reaching actual customers with a cause marketing message is by putting it on packaging. And the reach and frequency of the media on packaging for certain high-volume CPG items is almost certainly greater than radio, print or outdoor advertising, and, in many cases, TV. More to ...

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...

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