Part of of that success comes from the SPLC’s use of third-party telemarketers who convince first-time donors that their money will be used to somehow “fight hate.” In reality, their money, and that of thousands of existing SPLC donors, will be used to fight poverty — for the telemarketers, that is.
As we’ve reported in years past, the SPLC pays these telemarketers far more than they raise over the phone. Last year the company paid telemarketers $2,266,887 donor-dollars to raise only $1,271,287 donor-dollars, for a net loss of $955,600 (p. 40).
As usual, the big winner was Grassroots Campaigns who were paid $1.8 million to raise just over $600,000. Telefund only pocketed 62% of the $340,000 it raised, while Harris Marketing kept 83% of the $256,800 it took in.
Since 2011, the SPLC has paid Grassroots $5,828,603 more than they received in donations. While it seems incongruous that a company like the SPLC, which is forever sending out fundraising letters, as “the need has never been greater,” would be able to survive such financial hemorrhaging, the truth is they’ll make a fortune from it.
In essence, the SPLC is paying the telemarketers for the personal information of thousands of proven first-time donors, which they will feed into their own uber-efficient in-house fundraising machine. They take a loss on the first year but make it up with years, or even decades of successive donations down the road, at a sweet 100% profit.
The company isn’t even taking that much of a hit, as all of the first-time donations go straight to the telemarketers and any deficit is made up out of the existing donor pot, without any of the donors being the wiser.
How many long-time donors does it take to make up a $955,600 “shortage”? At $100 a pop, just under 10,000 donors. At a more reasonable $25 donation rate, just under 40,000 well-meaning suckers.
Granted, the use of third-party telemarketers for such purposes is not illegal and is practiced by many of the largest non-profits in the country. It’s up to the potential donor to ask the solicitor how much of their money will actually reach the SPLC.
Since Grassroots is paid a flat fee, they can even tell Grandma with a straight face that all of her donation will go to “fight hate.” That the SPLC is only going to triple the amount and send it back to Grassroots is merely a minor detail.
We’ve only just made our first pass over the SPLC’s latest financials. Stay tuned for more information on where the money goes.