When starting a fundraiser, a nonprofit should declare a threshold amount. If the nonprofit doesn’t raise at least that amount, the fundraiser should be declared a failure and the money should be returned. This should be a general practice that most nonprofits adopt.
I think this is a good idea for specific ‘kickstarter’ projects by organizations. I don’t think nonprofits’ main fundraisers should generally follow this model, because:
(a) It puts too much psychological emphasis on failure and disaster.
(b) Fundraisers can go surprisingly well or surprisingly poorly for complicated and weird reasons. E.g., maybe your social media announcement got ignored because another big news item happened to drop the same day, and this had caused someone who writes a popular newsletter to delay mentioning your fundraiser, and then a few complicated downstream things happened and you fell slightly short of your minimal threshold. There might be ‘vote of no confidence’ mechanisms organizations should put into place to ensure accountability, but I’m wary of implementing that using a fundraiser.
(c) If a ‘failed’ fundraiser doesn’t translate into your organization literally closing up shop, then it may be important to hold onto the funds from the failed fundraiser in order to successfully execute a pivot. Less cash generally means less flexibility, and successful pivots generally require more flexibility and outside-the-box thinking.
(d) It doesn’t give donors an option if they don’t want their money back. (Having a kickstarter ‘project’ separate from the main fundraiser could address this. Perhaps even have an option like ‘if the project fails to get funded, I want my donation to go to the organizations’ other activities rather than going back to my pocketbook’.)
Seems like some fundraisers are an excellent fit for this model and don’t do it (e.g. fundraising for a discrete new project.) Others may have smooth utility curves. So, there are two potential claims here:
Many fundraisers that should be like this and aren’t. (I strongly agree with this one.)
Fundraisers should predominantly be like this. (I weakly disagree with this one.)
All good points. I’ve updated my vote.
Alexei can you say more about why you endorse this proposal? In particular, would you change your mind if you believed this claim?
Ideally the utility the donor gets (on reflection) is closely related to the utility the charity gets :-) But I agree that it’s important to take donor “hedonics” into account.
I updated my vote in response to Rob Bensinger’s comment.
Regarding that claim, there is a related question of: is utility the donor gets from donating money “smooth” with respect to the amount raised?
I think this claim’s title is too long to be used a handle for the concept.
Fixed.