Ask the Experts: Vendor/Client Relationships
A direct-mail provider in the Chicagoland area recently posed this question:
My company partners with many nonprofit organizations. Several of them annually ask us for donations back. We make it known that our policy is to review what we have done for organizations in December, and if a company wants us to make a donation they may [ask us], in writing, at that time.
About six weeks ago, one of these nonprofits contacted us (via e-mail) asking if we would consider making a $1,500 donation to a special event they were having.
In spite of the fact that our policy of a written request in December was not followed, we decided to show good faith in the relationship we had with this nonprofit and sent a donation for $250.
(As an aside, this organization’s policy is to pay its vendors in 90 to 120 days.)
The donation was met with the following response from the chief development officer/vice president of marketing: “The president of the Foundation is very disappointed in your level of commitment. It reflects poorly on me personally and my relationship with her and the Foundation. Your company was the Foundation’s largest vendor last year in terms of dollars spent. I know times are tight, but the success of the Foundation is dependent on the generosity of its friends and associates. Please re-look at your level of commitment. Thanks in advance for re-considering.” (I have condensed the remarks for time and space).
After re-considering, we decided that we financially could afford to give no more; we had given at a level at which we were comfortable. Upon receiving this information, this was the response from the nonprofit in question (again condensed): “As I know you are very well aware, we have alternatives in meeting our printing and mailing needs. These alternative vendors have given $1,000 to the Foundation. It appears as if all parties might be better off parting ways.”
I guess my question is, where do the standards of right and wrong fall here? Is it ethical, what was done and the way it was done?
Our experts respond:
This is an amazing story. I can’t but believe there may be more to it than meets the eye.
I have no quarrel with the nonprofit making the request on relatively short notice. Oftentimes, a special event is not planned far enough in advance to get the request in by a deadline.
But on the face of it, I’d say good riddance. How hard does one have to work to meet the needs of a bad customer?
For the nonprofit to end the relationship on these terms means the VP didn’t value the relationship anyway, and it was likely about to end. The DM company saved 1,500 bucks.
And if I wanted to be a smartass about it, I would compute the value of the revolving loan based on late payments and write back and suggest that I’d be willing to donate the value of the loan as an ‘in kind’ service.
— Thomas W. Hurley, partner/president, Non-Profit Group, DMW Worldwide
The ethics side of this issue isn’t my turf, but the communication side is. My feeling is that, from the nonprofit’s point of view, this was a real failure to communicate effectively. Despite the ease of e-mail and other (often faster) ways of communicating, we always counsel nonprofits to communicate bad news of any kind by voice. This nonprofit should have called, requested a meeting and expressed their appreciation of the corporation’s past support. Then they should talk about the level of commitment they’ve experienced previously from the corp. and others, and discussed why the giving was cut.
Ideally, they want to up the gift now or in the future — and that only happens by learning and building understanding. If they chastise a supporter, they’re only going to alienate them and reduce the likelihood of future support.
— Sarah Durham, principal, Big Duck
For more expert responses to this question, see next week’s Advisor.