He's the kind of donor everyone loves. Every year's end, he makes a donation of around $1,000. He gives a couple of other smaller gifts at other times of year. But it's not just his money they love.
He's friends with many people at the org. He volunteers regularly, taking the jobs it's hard to get others to do. He has served a couple of terms on the board through the years. He talks up the org with his social circle and has brought in several major donors.
A Dream Donor, really.
A couple years ago, the org did something that's fairly common, and very smart: They put first class stamps on the return envelopes in a direct mail pack.
It's smart, because it works. It dependably increases revenue by boosting response rate. There's just one trick: the investment works with donors who give $100 and up. Below that level, the increased cost is not worth the increased revenue. But above that level, it is one of the most dependable and easy ways to raise more money.
That's why the org did it.
But when Dream Donor got the piece, he was concerned. He figured there was no way adding 60¢ to the cost of every pack could be a smart expense. He called the executive director to point out what he was sure was an error.
And that's where things went wrong.
The executive director either didn't know or didn't have the wherewithal to explain the truth about those stamps. He apologized to the dream donor and sent out the order: No postage on return envelopes ever again! Dream Donor caught our money-wasting mistake.
And that was that. They now never use that easy, cost-effective revenue-enhancing tactic. The estimated loss in net revenue is about $4,000 every year. Much more than Dream Donor gives.
Following Dream Donor's advice is expensive. It's exactly the type of harmful "donor dominance" that we should never let happen. But this was from a nice person -- not a mean-spirited jerk like we might be watching out for.
I think if Dream Donor knew the cost of his advice, he'd be horrified. But he has no access to that information, and nobody wants to tell him. It would have been so easy for his friend the executive director to simply tell him the truth up front. I'm pretty sure he would have understood.
Letting donors dictate your strategy is a mistake.
If someone doesn't like or doesn't understand something you do, just tell them the truth.
And always make your decisions on knowledge, not the opinions of amateurs. And the includes the opinions of the nice ones.
