New fundraising motto: It's best to give and receive

Six years ago, radio personality Tom Joyner was deeply concerned with dropout rates at historically black colleges. So he did what any other fundraiser in a crisis might do. He threw a party. A big party.

What's known colloquially as "The Ultimate Party with a Purpose" - a seven-day Caribbean cruise complete with A-list entertainment from the likes of musical troupe En Vogue and comedian Sinbad - is now the Tom Joyner Foundation's top annual fundraising event, netting nearly $1 million per year for scholarships. Donors have the satisfaction of knowing they contributed to a genuinely good cause - and procured themselves an unforgettable vacation in the process.

For some years now, fundraisers have been seeking to make charitable giving as pleasurable and as painless as possible. It's a strategy designed to boost philanthropy in a culture in which notions of sacrifice and self-denial hold little appeal.

Examples of the gain-through-giving trend abound. When public school districts in the United States need more dollars than their local tax bases generate, 4,800 foundations nationwide stand poised to help fill the gap. One of their most successful methods: raising funds through country-club golf tournaments or other types of high-end recreation.

For many Americans, this more indirect form of giving is now the style of philanthropy they find most familiar and most comfortable. When surveyors asked consumers how they would support charities during the last holiday season, more than 50 percent told Cone Marketing Inc. they would buy from retailers who contribute to good causes.

Nonprofits have undoubtedly benefited from the wave. Tourists are helping their local churches by traveling with outfitters who drop a fraction of the profits onto the offering plate. College graduates are financing life on campus by buying housewares and DVDs with credit cards linked to their alma maters. On the whole, charitable donations have more than doubled from $119 billion in 1994 to $241 billion in 2002, thanks in part to new perks inspiring new donations.

Yet not everyone is convinced that painless giving is always a good thing. Organizations might get the money they need, but donors who know no sacrifice pay a different kind of price, according to Eugene Tempel, executive director of the Center on Philanthropy at Indiana University.

"These acts are unconscious giving," says Mr. Tempel, referring to what he terms "transactional philanthropy." "If they give consciously, and that causes them to part with something valuable, they get something back for that, what some regard as the 'warm glow' of the giver. But if they give unconsciously, that's not their philanthropy. It's a corporation's or someone else's."

The term "philanthropy" broadly encompasses a range of donation types including giving money, time, and other resources to a mission-based organization or cause. Whatever sum a person might donate in a given year is tax-deductible.

However, so much of today's fundraising comes with valuable perks for donors that Internal Revenue Service codes now require donors to subtract their personal gain from the amount spent. Example: A cruise that normally costs $3,000 - but increases to $4,000 when offered in support of a cause - would enable the buyer to write off just $1,000, which is the difference between the retail value and actual cost when purchased for a fundraiser.

Still, limitations on deductions haven't slowed the trend toward offering goodies in exchange for gifts.

"Folks are almost insensitive to the price because of the commitment to the cause, and the quality of the entertainment makes this a valuable investment," says Neil Foote, spokesman for the Tom Joyner Foundation, which charges between $2,500 and $4,000 per person for its cruise.

"It's been tried and true, whether it's a golf tournament or prominent entertainment, that folks always like to have a good time... To know they're helping someone on the back end adds a little bit more of a smile to the good time."

Such giving might be "charity, but it's not necessarily service," says Peter Hocking, director of the Swearer Center for Public Service at Brown University. The distinction matters, he says, because those who give without much detectable sacrifice are apt to find life less meaningful than those who somehow feel the pinch.

"Giving people a chance to get together with friends and do something comfortable is a necessary part of the way nonprofits work today," says Mr. Hocking.

"However, that's different from moving into a different kind of space where real change happens and getting to some of the root causes of the problems we see... You want to get donors to the point where they feel the donation."

Within the fundraising world, efforts to provide perks for donors are regarded either as crucial or pointless, depending on the school of thought. Some, such as the March of Dimes, send free mailing labels to potential givers even before receiving donations, hoping to inspire generosity.

Local affiliates of the Public Broadcasting Service (PBS) use the reverse approach of rewarding donors with tote bags, mugs, and other logo-emblazoned paraphernalia.

Yet perk programs run the risk of detracting from the commitments of long-term donor relationships, says Steve Batson, a veteran fundraiser now with the Camp Coca-Cola Foundation.

"I don't want to have to buy your donation or 'quid pro quo' it because then I don't really have you connected to the organization," Dr. Batson says.

"Your heart is tied to the merchandise rather than the organization... I want you to always feel like it's a pleasure and not ever a pain to support our organization. I just hope that pleasure isn't tied to a particular gift."

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