The NonProfit Times - May 15, 2008 - (Page 11)

DIRECT RESPONSE ing an “agency fee” or “commission” onto printing and other services. “Firms that charge a commission -- typically 15 to 17.5 percent -- on vendor services often make huge amounts of money even though their monthly fees, charges for creative services, and/or other billings are low,” said Warwick. “Time and again, I’ve seen nonprofits fooled by this practice, persuading themselves they’re getting a bargain by not adequately looking at such markups.” Fewer nonprofits,Peters added,“have direct marketing experts on staff who know how much a package should cost or have financial management who insist on competitive bidding.As a result, the opportunities for charities to ‘overpay’ are more plentiful.” He suggested adding a layer of scrutiny. “There are no arcane mysteries of direct marketing,” said Peters.“Charities need to think about the simplest of best business practices:requiring your agency to get competitive bids on each package mailed and making sure you know what you are paying in fees, mark-ups, commissions, discounts, and so on.” SEE THROUGH “How nonprofits cannot insist on transparent billing in this day and age of full disclosure and charity accountability is a mystery,” said Peters. He defined those terms as the agency showing the charity all of the subcontract “Always check references from any venbills (printing, lettershopping, data prodors you are considering,” recommended cessing, envelope manufacturing, etc.) for Thomas. “It seems obvious, but someone the particular mailing. else might have already found that some “I have had charities express surprise charges are not included in the vendor’s that they were paying 20 percent markproposal or that the vendor has a history of ups on mail production in the form of hidover-projecting income.” den commissions from A problematic referthe printers and other ence recently derailed vendors to the agency,” one firm’s candidacy, recalled Peters. said Thomas.“I do check references from like inBy “hidden” he means stitutions to find out the printing bill given to how their pieces perthe charity does not show formed and any chalthat the price included a lenges they faced when commission to the agency working with the venfor performing this work dor. We have declined with the vendor. working with one firm Charities, he asserts, based on feedback from should demand a cona trusted colleague at antract guaranteeing transother museum,” she said. parency. Agencies that offer transparent billing Geoffrey Peters, president and CEO POST-SEASON PLAY agree to reveal all inforof the CDR Fundraising Group “I recommend always mation about markups looking at what the vendor said it can do and to renounce taking funds from subfor you and compare that with your own contract vendors, helping the charity feel past results,” said Thomas.“If a new vendor assured that they are in fact receiving comis projecting to double your revenue for petitive prices. half the price you have to look at your market and past experience to see if this is HEAR IT ON THE GRAPEVINE reasonable.” All nonprofit managers know that Warwick pointed out another potential when they were hired, the organization pitfall.“Do not be sold on the company by checked their references. Now, it is time a dazzling senior person in the firm who for managers to return the favor. then turns over the account to a junior, inexperienced person. Always find out exactly who will be managing your account and make sure you interview that person,” said Warwick. The relationship angle is most critical for Calabrese Smith, because, she noted, “price and product seem fairly consistent among those firms that specialize in animal welfare fundraising.” The last three times the organization put out an RFP for direct mail it was based “more on personal relationship with account executives combined with the track record and reputation of the company,” she said. Of course, price is very important,“but we have focused more on reputation and track record of the company, as well as our relationship with the account executive,” she said. Finally, Warwick advised, nonprofits ensure that any agreements are put into writing. NPT Rob Blizard serves as director, gift planning for George Washington’s Mount Vernon near Washington, D.C., and as a board member of the Montgomery County (Md.) Humane Society. His 20 years in fundraising and marketing experience also includes both nonprofit and corporate positions at the Humane Society of the United States, Marriott and MCI. MAY 15, 2008 THE NONPROFIT TIMES www.nptimes.com 11 http://www.chemart.com http://www.boxwoodtech.com http://www.boxwoodtech.com http://www.boxwoodtech.com http://www.chemart.com http://www.nptimes.com

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The NonProfit Times - May 15, 2008 Tying Multiple Sub-Brands To The Primary Idea Executive Session: Giving The Donor The Chance To Say Yes Blogging From The Top Contents Striking The Best Deal Don't Be Fooled Immigrants And Philanthropy Bringing In The Dough Good And Bad Organizational Evaluation Design Your Message You’ve Got Mail? Hybrid Power Calendar NPT Jobs Resource Directory

The NonProfit Times - May 15, 2008

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