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Author: TDMENEUF Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5550  
Subject: I won't be donating to Grameen again Date: 12/20/2000 6:38 PM
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I made a small donation to all 5 charities for my kids on FFF. Not a lot, don't have a lot to spare, but since I didn't really prefer on charity over the other, I made equal donations to each.

I won't be doing that again. Especially if Grameen is one of them again. Today in the mail, costing $1.21 to send it to me was a packet that probably cost more than my donation did just to say Thank You. I don't want a thank you, I want to know my money is going to work for the great cause, not thank you letters, pretty brouchures and postage.

At least with AShoka I only got a simple letter, total cost maybe $1.00 of my donation.

Deannda
If the other charities follow suit like Grameen, I'll think twice about donating to them at all.
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Author: jbjorck One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3439 of 5550
Subject: Re: I won't be donating to Grameen again Date: 12/20/2000 10:35 PM
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You wrote:
"I don't want a thank you, I want to know my money is going to work for the great cause, not thank you letters, pretty brouchures and postage."

--------------

I appreciate your concern. I also hate waste, but when I take a step back and see the big picture, I do not see this as waste. Each of these charities most likely get thousands of donations, and if they didn't say "thank you" to each one, they would soon be cast as ungrateful. So they DO say "thanks" AND at the same time, they provide more information to persons who they already know are at least interested enough in them to make a one-time initial gift. This is two-for-one approach is cheaper, and it is analogous to targeted marketing. It is a good strategy that can result in REPEAT donations.

All charities are in the business of obtaining funding. Sending mail to people who are already interested (i.e., those who have already donated) is more effective than sending it out unsolicited. It also makes sense to say "thanks" for donations, and to not discriminate between small and large gifts.

Now, the most efficient, cost-effective "thank-you" note is a "one-size-fits-all" note. The organization needs to think in terms of "thousands" of donors, and it would cost MORE for them to individually evaluate each donation and appraise what type of "thank-you" to send. In fact, with very large numbers of donors, the persons who see donations and the persons who process "thank-you's" can sometimes be in completely different ends of the building.

I realize that, to the individual very small donor, $1.21 can seem like a lot. But consider if the average donor gave even just $15, then the organization is--on average--receiving $13.79 for their $1.21 investment. That is extremely cheap "advertising" costs. Perhaps an analogy would be useful. If the typical person went into a banquet hall kitchen after an event and saw the huge cans filled with wasted food there, it would probably shock and discourage this person. But he/she would then need to remember that this is the "waste" collected from many people, so the average "waste" is actually quite small. The "bottle-neck" effect of seeing it all in one place makes it seem much larger.

As I said above, a large organization would probably need to spend MORE dollars to hire people to manually decide what type of thank-you note to send to each donor than they would spend on a "one-size-fits-all" average approach. (The one-size approach is also most likely computerized and automated to save even more money). When you step back and get the big picture, $1.21 is actually probably a very cost-effective investment (particularly if even one-in-ten "thank-you" notes results in a REPEAT gift).

I hope this helps.

Jeff Bjorck


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Author: TDMENEUF Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3442 of 5550
Subject: Re: I won't be donating to Grameen again Date: 12/21/2000 7:45 AM
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I hope this helps.

Jeff Bjorck


I understand all that. IF it was just the $1.21 shipping, that would be one thing, but you also have to consider the cost of the brochures, papers, envelopes and the time of the people involved in putting the stuff together and getting it shipped out. This more than exceeded my donation. And have they ever heard of bulk mail? This is much cheaper than going first class on everything.

A simple, one page note, saying Thank you for your donation through the Motley Fool would have been more than enough. Also noting that if I wished more information please call or write... you get the picture.

They will not be getting a "repeat" gift from me because of the extravagance of the thank you note. It was not necessary for all that information. I got all the information I needed from the Fool.

And if even if "one in ten" thank you notes resulted in a repeat gift, was that gift enough to even cover the original 10 notes? Mine wouldn't have been. Mine wouldn't have covered the postage let alone all the other hidden costs.

This is my personal opinion. I hate seeing waste, especially in a charity organization. I hate seeing money spent on things that could be better directed to the cause it was donated for. I just think they should simplify the thank you process. They might be surprised at how much they could save. For example:

10,000 donations X thank you packets @ $1.21 each = $12,100.00

10,000 donations X thank you letters @ .33 each = $3,300.00

What are the savings? $8,800 and that could be even more if they went to a bulk mailing process, waiting until the drive was over and sending out all the thank you letters at once. Now maybe $8,800 isn't much to an organization like Grameen, but it is to me and it's money I feel that could be used for the original cause.

Deannda
The above figures are estimates and do not even include the cost of materials that will be thrown away and wasted by the recipients.


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Author: imthekidd Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3444 of 5550
Subject: Re: I won't be donating to Grameen again Date: 12/21/2000 2:33 PM
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I agree with the original poster. Nothing bothers me more than to give generously to a charity I believe in and then find out they are not good stewards of donations. Hey, a 20 cents postcard would be thanks enough if they must send one. How about how United Way treated donations a few years back with gross excesses by the administrators? I still cannot stomach to give to them because of it. I give directly to the agency and not through them. Just recently our town spent over $20,000.00 to "rent" a Christmas tree and decorations. What are these fools thinking? That is a years salary for a lot of people to "rent" a tree! I think we all need to keep our eyes and ears open and research what is going on with our donations.

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Author: BenMoyle Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3446 of 5550
Subject: Re: I won't be donating to Grameen again Date: 12/21/2000 2:55 PM
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I can't get as excited as others about a single mailing in response to a donation, even a large packet where the information from TMF is considered superior (since it is the net of their study). The charity can't reasonably be expected to tailor their mailing differently for Fool investors versus others, that takes effort away from other work, effectively costing more than the arguably 'wasted' postage.

What I would be more concerned about is if these charities do what many seem to, respond to donations with solicitations for more of them, or sell their list to others. They may even accelerate the frequency of solicitation to those who do respond to secondary requests. (I think political parties do this.) From the charities' perspective this is making their solicitations more efficient, but from the donor's perspective it's a major irritation, because of all the extra mail (some of these seem to be harder to get rid of than a Newsweek subscription), and because it attempts to put you into a guilt feeling for saying 'no' when in fact you are a contributor, just not 'recently'.

Does TMF investigate this aspect of the charities?

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Author: DollarIQ Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3447 of 5550
Subject: Re: I won't be donating to Grameen again Date: 12/21/2000 2:59 PM
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On the whole 'thank you for your donation' marketing literature debate: I wonder, can't charities begin to make a relatively uniform option to allow people to "opt out" over receiving stuff, or at least excessive stuff?

For instance, if we do this via internet or in response to a flyer or whatever, it should have a little checkbox we can mark off to refuse receiving anything beyond an acknowledgement (yes, I know they'll send something anyway, but basically keep it to a minimum). They can keep the checkbox really obscure so only people who obviously don't want it will be determined enough to find it and check it off (think about those sweepstake forms in which you can opt out of their 'free' magazine offers, but still participate in the sweeptstakes).

I understand the heavy emphasis on marketing materials, the thank you stuff, etc., because they hope that a proven donor (no matter what the size of the donation) will pass the word around.... the best marketing effort is usually the person who's already donated. Unfortunately for their marketing efforts, many of us (at least here on TMF) are too savvy to be pursuaded to do more merely because we got a pretty (and big!) brochure or stuff to clutter our mailboxes.

I suspect this is a big beef common to regular donors around the country for a long time now, since I've been aware of this debate since even before I made my first contribution by mail, ever ... really, can't there be a way for charities to cut down if not eliminate their marketing efforts to established donors? In particular, the more savvy donors (if, in fact, it's the savvy donor they are looking for).

If the more sophisticated charitable organizations start this, I'm sure there will be a trickle down effect. Save money, effort, time, and not least, paper.

Just my thoughts once again, $IQ


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Author: TMFPitch One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3448 of 5550
Subject: Re: I won't be donating to Grameen again Date: 12/21/2000 3:18 PM
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What I would be more concerned about is if these charities do what many seem to, respond to donations with solicitations for more of them, or sell their list to others.

Thanks for asking that. We are not aware that any of our chosen charities sell their lists to others.
It is a very good question, and one we will include in our questions for the 2001 drive.

The dialogue on this board is most helpful to us. Our goal is to improve the drive every year, and as always, we will do that with the help of our community.

Thanks, Fools.
Julieta
TMF Pitch


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Author: ClydeStearns Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3468 of 5550
Subject: Re: I won't be donating to Grameen again Date: 12/24/2000 12:23 PM
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Greetings, Fools!

My name is Brooke Stearns and I work for Grameen Foundation USA.

First, let me apologize for insulting one of our donors with our thank you. I understand your concerns and find them very valid.

Several donors will include (with their donation) a request that we do not send additional information in order to maximize the use of their donation, and we gladly comply with this request. I would strongly encourage those of you who would not like additional information to do so. This allows organizations to save their money while maintaining an effective donor cultivation strategy.

Otherwise, we do try to empower our donors with additional information about Grameen Foundation USA. This information is often read by the donor and shared with friends and family-- a highly effective means of spreading the message of Grameen, especially as a donor tends to be a Grameen supporter.

Regarding the first class postage, I do not know why it was sent this way. Our standard operating procedure is to mail 3rd class and bulk whenever possible.

I certainly understand and respect the importance of making the most of donations and appreciate suggestions on how to more effectively do this.

I am pleased that overall, GF-USA is able to use approximately 85% of each donation for programmatic work. While on individual cases, it may appear that we are wasteful, overall we are able to target our funds to effectively empowering the poorest of the poor. For this Fool drive, only 10% of the donation total will support administrative costs.

Cheers,
Brooke Stearns

(If you have any additional comments or inquiries, please feel free to e-mail me at GF-USA at bstearns@grameenfoundation.org.)

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Author: ShakespearesFool Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3481 of 5550
Subject: Re: I won't be donating to Grameen again Date: 12/29/2000 11:41 AM
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I agree with you,TDMENEUF. If you feel Grameen spent too much thanking you for your contribution, you are right to not contribute to Grameen again. And you should (as you did in you post) warn other people who may feel as you do. You should warn them of what Grameen does so they will never contribute to Grameen. That is the only sensible thing to do.

You are right not contribute to any charity that does its fund raising in a way you feel is wrong. You are right not contribute to any charity that spends more on administration than you feel is proper. Your are right not to contribute to any charity that runs its programs in ways you disapprove.

Why, after all, should you -- or anyone -- contribute to a charity that makes you feel uncomfortable with anything the charity does? Your shouldn't.

The best way to make contributions is to find charities you can fully support. Charities you feel so good about that you will give them large amounts of money to year after year.

I hope you find charities you can fully support. As a supporter of Grameen, I'm sorry Grameen will not be one of them. But that's O.K. There are thousands of charities that deserve support that I can't support. I can only hope that you and others who won't support Grameen will support the good charities that I don't.

I also hope that I and others who believe in what Grameen does will be able to keep contributing to Grameen in amounts large enough that their thanks and fund raising and administration costs are but a small percentage of our gifts.

Thank you for letting us know how you feel.

Fool on and prosper.

John, being ShakespearesFool since October 1999


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Author: foolishjk Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3482 of 5550
Subject: Re: I won't be donating to Grameen again Date: 12/29/2000 2:39 PM
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Hi John!

Thanks for your eloquent and caring post regarding whether to contribute to Grameen in the future. Truly Foolish.

I've been watching the discussion over Grameen's mailing very carefully, because I, too, contributed through the Foolanthropy drive.

My initial reaction on receiving the confirmation is that it was a tad excessive. I understand that charities need to educate current and future contributors. On balance, I'll settle for an acknowledgement that they received my contribution. One that supplies an address, website or other contact information, should I wish to learn more.

However, that doesn't mean I'll never contribute to Grameen again. I'm going to write them a polite letter about the packet I received, thanking them and requesting that I be taken off the mailing list. I don't really want charity spending money on me as a donor to the organization, but that's just me.

Have a Foolish New Year!

Foolishjk

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Author: TDMENEUF Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3486 of 5550
Subject: Re: I won't be donating to Grameen again Date: 12/29/2000 9:25 PM
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Regarding the first class postage, I do not know why it was sent this way. Our standard operating procedure is to mail 3rd class and bulk whenever possible.

I appreciate your comments on this matter and thank you for taking the time to respond to my inquiry. I did an across the board donation, not wanting to single out any specific charity in this matter because I am not that familier with any of them.

From what I have seen, mine is not a one time incident and maybe this time was just a fluke. But unless I could see more proof positive of where the money actually goes, I would hesitate to donate to you again.

My apologies if this offends anyone but it is my money that I work very hard for and usually any extra that I have goes towards animal groups and diabetes research as these are issues that are close to my heart.

Deannda
Thank you again.

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Author: TDMENEUF Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3487 of 5550
Subject: Re: I won't be donating to Grameen again Date: 12/29/2000 9:30 PM
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I hope you find charities you can fully support

I have several charities that I support. The Humane Society of the United States, The North Shore Animal League, the American Diabetes Association and also my local shelters with time and money and any supplies I might have. These are the charities I believe in and support. I had never heard of Grameen before the Fool Drive and they say first impressions are the ones that count.

Their first impression was not the best one. I am willing to overlook that but since the charity itself is not something I would normally support I felt it was necessary to let the Fool know what was happening with the Thank you Packets. It reflects on them as well.

Deannda
A very small thank you card would have been fine

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Author: UnReal Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3495 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/2/2001 12:48 AM
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>Today in the mail, costing $1.21 to send it to me was
>a packet that probably cost more than my donation did
>just to say Thank You.
>...
>At least with AShoka I only got a simple letter,
>total cost maybe $1.00 of my donation.

So you think $1.00 is reasonable to spend on a thank you note, but $1.21 is not???? Your argument doesn't make any sense!

>I made a small donation to all 5 charities for my
>kids on FFF. Not a lot, don't have a lot to spare,
>but since I didn't really prefer on charity over the
>other, I made equal donations to each.

Maybe the problem wasn't Grameen thanking you for your donation. Maybe the problem was you splitting your $5 donation among 5 charities!

Next year, give your tiny donation to a single charity. Do you think the charities like receiving $1 donations from people? That's a negative donation - you're costing the charities money on administration that could be going to charitable work!

UnReal


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Author: BenMoyle Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3496 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/2/2001 3:25 AM
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Unreal, the writer didn't say their donation was $1 per charity. What was said was that the postage for the package was $1.21, and that the package (contents) may have cost more than the donation.

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Author: TDMENEUF Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3497 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/2/2001 8:03 AM
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So you think $1.00 is reasonable to spend on a thank you note, but $1.21 is not???? Your argument doesn't make any sense!

Total cost of Asoka Thank You was probably about $1.00.

Cost of POSTAGE alone for Grameen was $1.21, that did not include the brouchures themselves and any additional labor costs.

Maybe the problem wasn't Grameen thanking you for your donation. Maybe the problem was you splitting your $5 donation among 5 charities!

Next year, give your tiny donation to a single charity. Do you think the charities like receiving $1 donations from people? That's a negative donation - you're costing the charities money on administration that could be going to charitable work!


I only donated $5 to each charity since that was all I had to spare and since I did not prefer one charity over another. They say that every cent counts and I believe that. Silly me. Your premise is basically if I don't have a substantial amount to give, don't bother?

Why don't you get your facts straight before jumping all over other people. Talk about UnReal!

Deannda
Thank you for you input though, have a Wonderful New Year!

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Author: TMFSelena Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3498 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/2/2001 8:18 AM
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<<I only donated $5 to each charity since that was all I had to spare and since I did not prefer one charity over another. They say that every cent counts and I believe that.>>

I'm glad you and others believe that. I do too. Yes, if a charity is looking at a stack of checks, of course it would be more exciting if each was for $50 and not $5. But on the other hand, each one represents a new donor, and a potential new longtime donor.

Our drive not only raises $$ in the few weeks that it runs - it also delivers to charities a bunch of new donors, some of whom come to really like the organizations and who continue to support their work.

So it's kind of cool that while we might end up raising $500,000 or $600,000 or whatever in this drive, the uncalculatable total might be millions over many years.

And yes, every bit counts. For example, on average, it costs Lifewater $4 per person to deliver a lifetime of clean water. So $5 to Lifewater will provide clean water for one more person. And a few thousand $5 donations to Ashoka will fund a social entrepreneur for an entire year.

Cheers!

Selena

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Author: UnReal Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3499 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/2/2001 11:20 AM
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I said:
>Next year, give your tiny donation to a single charity.

Then you said:
>Your premise is basically if I don't have a
>substantial amount to give, don't bother?

No, my premise is that if you were so worried about the "effectiveness" of your donations to each charity, that it would have been far better to give to just 1 (or even 2) than to all 5.

You're quite possibly right that the whole package Grameen sent you was worth $2 or so, which incidentally is far less than your $5 donation. But don't blame Grameen for sending you some brochures and pamphlets on their work. If you had sent the whole $25 to them, you wouldn't have felt so bad about it.

UnReal


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Author: UnReal Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3500 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/2/2001 11:25 AM
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>I'm glad you and others believe that. I do too. Yes,
>if a charity is looking at a stack of checks, of
>course it would be more exciting if each was for $50
>and not $5. But on the other hand, each one
>represents a new donor, and a potential new longtime
>donor.

All the same, if each donor is looking for the biggest effectiveness for their total donation, sending to only one or two is more effective than sending to all five, given the administrative overhead, postage and printing costs.

Of course, larger donations help reduce the overall percentage those costs take out of the total collected. The Fool seems to recommend people try and get the lowest commissions they can on each trade, why not recommend people reduce the "commissions" on their charity contributions as well?

UnReal


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Author: TMFSelena Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3501 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/2/2001 11:32 AM
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<<Of course, larger donations help reduce the overall percentage those costs take out of the total collected. The Fool seems to recommend people try and get the lowest commissions they can on each trade, why not recommend people reduce the "commissions" on their charity contributions as well?>>

A great concept. :)

It's true that in many ways, the bundle of charities you donate to is like a portfolio. Ideally, we should all be paying close attention to any organization we conribute substantially to -- just like investments in companies.

Selena

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Author: jbjorck One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3503 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/3/2001 2:09 AM
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Selena wrote:

And yes, every bit counts. For example, on average, it costs Lifewater $4 per person to deliver a lifetime of clean water. So $5 to Lifewater will provide clean water for one more person. And a few thousand $5 donations to Ashoka will fund a social entrepreneur for an entire year.

------------

I agree with Selena, and I also agree with the idea of making the "most" of donations by not spreading them too thinly. But then again, let's look at the big picture. More than once, I watched as the "totals counter" clicked off a $4 contribution for Lifewater--a paltry $4. Yet this does "save a life." More importantly, adding all those donations together has now produced a total for Lifewater that will result in the gift of life (clean, safe, life-time supply of water given in Christian love) to...drum roll please...30,750 men, women, and children!!!

And that is just "so far."

So THANKS to each contributor to each charity. We have laughed in the face of a horrid stock market and together have made an astounding difference in the world.

Be encouraged!

Jeff Bjorck


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Author: QuietGuy One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3504 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/3/2001 12:30 PM
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I agree with Unreal (although I think the tone needs to be softened some). There are many aspects of investing that can and should be applied to charities, not just keeping commisions low. You should research charities thoroughly before donating. This many sound counter-intuitive to the foolanthropy drive, but you should not impulse give. Charities really are an investment. You do not receive money directly back from them, but, I beleive, you receive as you give. To put it another way, what comes around goes around. Who knows, you might find yourself in need of charity someday. It is possible that someday you may find yourself with a disabled car on some lonely strech of highway, and the person who stops to help is some immigrant who was able to able to come the U.S. because they built a business with a loan from Grameen or built up money with animals from the Heifer Project. All of our lives are interconnected.

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Author: markoose Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3506 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/3/2001 10:29 PM
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sorry if i sound repetitive, but i only read a couple posts of this thread

in any event...


i, too, contributed to all five charities

and like the rest of us, i, too, received that whole brochure thing

my initial reaction was the same of the original poster's

but i immediately stepped back and saw the bigger picture... and felt a heck of a lot better. Grameen is one heck of an organization... and one that i will be contributing to in the future (actually first heard of them on 60 Minutes, i believe... and was simply blown away)

now, before time runs out, get out there and double your original donations... and double the lives saved and improved!

Foolanthropy on!
; )

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Author: imthekidd Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3507 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/4/2001 5:05 PM
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I can't believe people justifying such a waste of money. Hey a postcard to acknowledge would only be 20 cents or so. I admire their work but not the waste of brochures etc to people who didn't request them.

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Author: QuietGuy One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3508 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/5/2001 12:53 PM
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"I can't believe people justifying such a waste of money. Hey a postcard to acknowledge would only be 20 cents or so. I admire their work but not the waste of brochures etc to people who didn't request them."

No matter what the charities do, they cannot win on this issue. If they do not send out nice thank-you's, someone else will get ticked off and think, "if that's their gratitude, they are not getting any more of my money."

The cost of acknowledgements is already factored into the evaluation that the Motely Fool did. That cost is part of fundraising costs. Grameen spends an overwelmingly large percentage of donations on actually helping people, not on fundraising. How can they accomplish this if they are waisting money on acknowlegements as you contend? You are not seeing the big picture.

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Author: jbjorck One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3511 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/5/2001 10:42 PM
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"I can't believe people justifying such a waste of money. Hey a postcard to acknowledge would only be 20 cents or so. I admire their work but not the waste of brochures etc to people who didn't request them."

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At the risk of being redundantly redundant...

Please read this entire thread. It has a lot of helpful information on this whole issue. As for "wasting brochures etc to people who didn't request them", please consider the following.

Brochures are used for development of new fund sources. Sending brochures to people who have already given has a much better chance of resulting in: 1) repeat donations and 2) having the information passed on to someone else, together with a personal endorsement from the original donor.

But even if these organizations just sent out brochures to people who didn't ask for them, this would still be a good use of money. It is analogous to a commercial. When is the last time you felt offended that Coca-Cola spent millions on a TV commercial piped right into your living room, even when you didn't ask to see it? I assume that you viewed Coke's actions as a good part of marketing, to raise awareness of their product. To be successful, charities must to the same thing.

Jeff Bjorck

P.S. Now that we are over 600,000, who knows? We just might beat last year by the time all the totals are in! Go Foolanthropy, and special thanks to Selena, Julieta, and the rest of the Fools who made this all happen!


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Author: TMFSelena Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3512 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/6/2001 11:06 AM
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<<It is analogous to a commercial. When is the last time you felt offended that Coca-Cola spent millions on a TV commercial piped right into your living room, even when you didn't ask to see it? I assume that you viewed Coke's actions as a good part of marketing, to raise awareness of their product. To be successful, charities must to the same thing. >>

This is an interesting analogy. Yes, you might accept Coke's marketing as good business. (Especially, perhaps, if you're a shareholder. And assuming that the overall marketing efforts are indeed fruitful.)

But as a consumer, you might *not* like the marketing efforts. But you accept them. Consider that without marketing expenses, a can of Coke might cost 10% or 20% less! (I'm just making up these numbers, but you get the idea.) We do willingly fork over our money al the time to entities that are spending money on marketing.

That's not to say that we shouldn't question any charity's marketing spending. It should be *effective* spending, not wasteful.

Selena

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Author: BenMoyle Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3513 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/6/2001 12:47 PM
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I think you have to hold the feet of charities a little closer to the fire. If a charity uses X% of its contributions to do advertising and solicitations, and the result of that is that they get more than X% new contributions (net of its use for more advertising), it could well be deemed efficacious spending. But suppose X is 50%? That still means that when we send them Y dollars to feed the starving children, dig a well, whatever, only half the money sent is actually going to food, or wells, not what the contributor had in mind. You just can't feel as good knowing you are also helping feed the children of the postman or the ad agent.

The counterargument might be that one can 'take credit' for the resulting contributions of those who respond to the advertising expenditure. Trouble is, they think they should get 'credit' for that.

So what's the correct amount of solicitation spending, or for that matter, any overhead expenses, for a charity? Beats me. I don't think zero is correct, indeed it's impossible. But I don't think 'whatever returns more net than it costs' is correct either, which would be the logic for a commercial endeavor (e.g., CocaCola). That kind of thinking is what got United Way in big trouble some years back.


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Author: TMFSelena Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3514 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/6/2001 12:55 PM
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<<But suppose X is 50%? That still means that when we send them Y dollars to feed the starving children, dig a well, whatever, only half the money sent is actually going to food, or wells, not what the contributor had in mind.>>

True. We actually didn't evaluate this measure for each charity this year, although I think it's probably a good one to add, in some way. Despite that, we *did* receive this info for some of the charities. If I recall correctly, Heifer generates c. $3 or $4 for each marketing dollar it spends. Lifewater generates even more. Much more. (Partly because it has spent little on marketing.) Regading America's Second Harvest, I recall learning last year about Foodchain that they often could turn $5,000 into $125,000 in corporate donations. (Foodchain since merged with A2H.)

So I agree that this is a very worthwhile measure to measure. I also think that the organizations we've selected remain very strong on most, if not all, measures that matter. Including, for the most part, this measure. A key criteria in our decisions was how efficient they are -- how much they can do with what we might give them.

Selena

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Author: jbjorck One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3515 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/6/2001 10:45 PM
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"But suppose X is 50%? That still means that when we send them Y dollars to feed the starving children, dig a well, whatever, only half the money sent is actually going to food, or wells, not what the contributor had in mind."

Good points, as are Selena's. Thanks for making good qualifiers of my original "Coke" analogy. Actually, I was not trying to say that any amount spent on marketing is good. What I was trying to emphasize (albeit with limited success) was simply the concept that we do not get mad when we receive "unsolicited" information from Coke.

The difference between Coke and a charity is how the "profits" can be defined. For Coke, dollars received are the profits, so anything that ethically raises dollars can be viewed as worthwhile. In contrast, with a charity, the "profits" are the number of people effectively served. Thus, inefficient development efforts waste charity "profits" and should be avoided at all costs.

Given that charity "profits" are "numbers directly served," consider the following. If a charity moved from spending 0% to spending 10% of its contributions on "literature, etc." and could document that this move resulted in a 30% increase in dollars donated and spent directly serving the beneficiaries (i.e., more recipients served), that would be OK, yes? Continuing with this logic, if the charity could realistically document that further increasing expense on "literature, etc." from 10% to 20% resulted in an increase in dollars donated/spent directly on serving beneficiaries from 30% to 50%, then that would be OK too, yes?

To make this less abstract, consider that large charities sometimes pay very high prices to broadcast television spots nationwide. Doing so, however, enables them not only to reach far more potential donors, but can be more effective in eliciting favorable responses from these donors. So even though such TV spots cost a lot more, they can result dramatically increased donations to spend directly on recipients.

Expense is relative. As long as one defines "profits" for a charity as "numbers of persons directly served," I believe that carefully increasing spending can be justified if it produces more of such "profits."

Still, I appreciate the alternative perspectives on the board, which helped me rehash and (hopefully) clarify my original position. Any further responses would be welcomed and appreciated. :o)

Jeff Bjorck


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Author: ShakespearesFool Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3516 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/7/2001 12:02 AM
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Yes, there may well be people who should get a postcard thank-you for their contributions to Grameen. Perhaps they include the loan officers of the Grameen Bank itself -- the people who walk or bike every day through the back roads of Bangladesh going from village to village to make loans to and take payments from the women (and men) who can feed, clothe, and house themselves and their children better because of those loans.

If some loan officers decide that they can afford to give some of their salaries back to the Bank to save more people from poverty, homelessness, or starvation, perhaps a postcard thank-you is best.

The pay of loan officers is low and their prospects are few (Bangladesh being a poor country and their education not being great.) No amount of thank-you is likely to get them to give even more. Besides, they know the work of Grameen better than any literature can tell. Here the economical thank-you may be right.

There may be some low-income Americans with poor prospects who should get the postcard thank-you. You may be one of them. But even if you are, I suspect that you are one of but a very few who are contributors to Foolanthropy.

Oh, yes, I know -- particularly from reading posts on the Living Below Your Means board --that there are many generous Fools just out of school with low incomes and large student loans to pay off. But that is not permanent. Their prospects are not limited. They are not likely to stay with those low incomes.

One out of seven American families is already making over $100,000 per year. Who is most likely to join that elite group? The educated, computer savvy, Foolish- investing young people who frequent The Motley Fool.

Perhaps a young Foolanthropist can afford only $10 per year for the next decade. But could that rise to $50 or $100 a year for the decade after that? Could that again rise to $1,000 or more each year for many years after that? (Even at only 1% of an income of over $100,000?) For such a Foolanthropist is an expensive thank you out of line? Even if this year's contribution is only a few dollars? I think not.

Further, I suspect most Foolanthropists can already afford more than $100 per year for their most favored charity. Is it reasonable for Grameen to try to convince us to make Grameen our most favored charity? Is it reasonable for us to at least give them the opportunity to present their best case to us? Even if they use an expensive batch of literature that comes with a thank you?

I think it is reasonable for them to try. So I will continue to contribute to Grameen. And continue to encourage you to contribute too.

What Grameen is doing may not make sense to the wise. But it makes great sense to this Fool. Perhaps, in time, it will make sense to you, too.

John, Being ShakespearesFool since October 1999

P.S. Please don't try to guess at the average cost of the literature you get. Remember that high quality literature is a necessity for attracting most high-level donors. It is needed whether you or I get it or not. Once they turn on the printing press the cost of each additional piece is but a little more than the cost of the paper. (And, if the printer is a contributor, the cost may be zero.)

Also, first class is the proper postage for thank-yous. It is probably still the only strictly legal way to send a personal message through the mail. (If a thank-you addresses you personally and mentions the amount you gave it is strictly personal.) And thank-yous are best received as soon as possible. Bulk mail requires that they wait until they have a bundle of letters to send and bulk mail letters can arrive long after they are sent. Not good.


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Author: BenMoyle Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3518 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/7/2001 5:18 PM
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The difference between Coke and a charity is how the "profits" can be defined. For Coke, dollars received are the profits, so anything that ethically raises dollars can be viewed as worthwhile. In contrast, with a charity, the "profits" are the number of people effectively served. Thus, inefficient development efforts waste charity "profits" and should be avoided at all costs.

Well, no, that is not what I am saying. Since any use of contributions by charities for advertising can only "pay off" by attracting more contributions, effectively contributors 'lose' that percentage which (on average) caused them to contribute, and same for operational overhead; it does not go to the stated mission. A good aspect of Foolanthropy is that it has little or no such cost, or TMF absorbs it, but that is nullified somewhat by the reality that the money just goes into the charities' bank account, and thus suffers the same overhead, whether it be high or low, as their average.

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Author: jbjorck One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3519 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/7/2001 11:03 PM
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"Well, no, that is not what I am saying. Since any use of contributions by charities for advertising can only "pay off" by attracting more contributions, effectively contributors 'lose' that percentage which (on average) caused them to contribute, and same for operational overhead; it does not go to the stated mission. A good aspect of Foolanthropy is that it has little or no such cost, or TMF absorbs it, but that is nullified somewhat by the reality that the money just goes into the charities' bank account, and thus suffers the same overhead, whether it be high or low, as their average."

--------------

Actually, this is not true in all cases. Lifewater, for example, has pledged to put 100% of all Foolanthropy contributions towards funding projects. Of course, someone still does have to pay the overhead for these projects though, and Lifewater states that its regular donors are agreeing to do that by marking their contributions "wherever needed."

But besides that, if I will only give $1 to a charity if they take my actual $1 and spend it on a beneficiary, I think this may be a bit short-sighted. Consider the following two proposals:

1) Would you like to donate $100 and have it DIRECTLY and IMMEDIATELY result in $100 to the beneficiaries? or.....

2) Would you like to donate $100 and have it DIRECTLY and IMMEDIATELY result in $75 to the beneficiaries, while the other $25 results, within 6 months, in obtaining 10 more donors who each give $100. From each of these $100, $75 will DIRECTLY and result in $75 going to beneficiaries?

Personally, I would want my money spent on the second proposal. True, I would not get the immediate satisfaction of having $100 of mine spent 100% on beneficiaries. But in exchange for the $25 investment in development, I would indirectly be responsible for an additional $750 going directly to beneficiaries.

Any investment (be it philanthropic or otherwise) is a "loss" until it produces a desired effect (e.g., profits, number of beneficiaries served, etc.). In the first scenario, the "loss" is immediately redeemed for an equivalent amount of "profit" (in terms of number of beneficiaries served). In the second scenario, the "loss" is not completely redeemed immediately, but the "profits" after the "delay" are greater (more people served).

I pick door # 2! :o)

Jeff Bjorck


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Author: BenMoyle Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3520 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/7/2001 11:15 PM
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I've commented previously on the folly of suggesting any specific group of donations is 'overhead free'.

As for the value of having some contribution money spent on advertising, and other overhead, I don't dispute that is necessary, and therefore valuable to some degree, I just don't know how much is optimal. My sole point remains that I don't think it can be measured the same way an expenditure by a commercial
operation can be.

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Author: jbjorck One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3521 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/7/2001 11:44 PM
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"As for the value of having some contribution money spent on advertising, and other overhead, I don't dispute that is necessary, and therefore valuable to some degree, I just don't know how much is optimal. My sole point remains that I don't think it can be measured the same way an expenditure by a commercial
operation can be."

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Ah, the circle is now complete...I completely agree with you!:o) Thanks for your good insights! In case it wasn't obvious, my comments were chiefly directed not toward you but toward those who were calling development efforts a "waste." Hopefully all of our comments will be useful to those running Foolanthropy next year to make it even better!

Fool on!

Jeff Bjorck

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Author: imthekidd Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3522 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/8/2001 1:54 PM
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I don't see what I am missing about the big picture: 20 cents thank you postcard versus several dollars on fancy brochures. I would send the 20 cents thank you card and state something like, please contact us for more information about our projects......etc....

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Author: QuietGuy One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3524 of 5550
Subject: Re: I won't be donating to Grameen again Date: 1/9/2001 1:54 PM
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"I don't see what I am missing about the big picture: 20 cents thank you postcard versus several dollars on fancy brochures. I would send the 20 cents thank you card and state something like, please contact us for more information about our projects......etc.... "

The big picture you are missing is how much of the overall budget does a charity spend on thanks-yous or fund raising verses. You are looking at only what they did with just your donation. If the charities are spending the same percentage on thank-yous as they did on yours then their over-all budget would be in terrible shape. But, their budget looks fairly efficient, so something else must be happening.

They still might be able to save money by using a cheaper thank-you, but they might loose donors who could be offended by the cheapness. They could send out thank-yous in proportion to the size of the donation, but there are added expenses in using more than one type of thank-you. They might not receive enought smaller donations to make smaller thank-yous worth while.

The bottom line is to judge a charity by its overall budget, not on single incidences.

You do make some good points. I offer my arguements in the spirit of friendly debate.

Best wishes,
Kyle

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