Incidental Fundraising Doesn't Work

Pet peeve #?:

I can't stand so-called cause fundraisers that don't make any sense. For example, in the past couple of weeks, in the interest of donating money to quake victims in Pakistan, a couple of restaurants in NY and other parts of the country have donated 10% or some similar percentage of their receipts for the night to quake relief. I think that's great for the restaurant - first, they look good and are doing something within their means, and second, they get a whole crapload of willing people with guilty consciences who use this excuse to socialize as their "I gave to the cause!"

If you think about the economics of contributions, this is totally the wrong approach - and can be damaging in the long run. A good Indian dinner can cost you upwards of $40 - $50 a head. A couple who may not go out regularly could end up spending $100 on dinner in the name of the "cause." So what?

1) In their minds, they've spent $100. In real dollars, that's a $10 donation. Actually, since I believe in good tipping, you may end up paying more in a tip than what goes to the cause (because the tip is not included in the calculations of total receipts). I don't care if you're using the new math - that's still not very good.

2) Still, they will likely be disinclined to write another check soon afterwards, because they feel like they've just used $100 that they could have saved or bought gifts or whatever else with. So who loses out in this deal?

Frankly, you'd be better off writing a $50 check to a relief organization while saving the $100 for a dinner at a restaurant giving a small percentage of the total bill to the cause.

So the take-home message? Basically, writing checks directly to organizations that are doing this work is a far better way to make an impact. These "percent of receipts" events are incidental to actual relief fundraising, and should be treated as such. If you feel like eating out that day, go to one of the restaurants. But don't do it to say that you gave to the cause.

Of course, this is different from the events where you know that all profits are actually going to go to the cause. Those exist too, and will likely cost you a lot less.