The California Attorney General released a report today that only one-half of all the funds raised through professional development firms actually goes back to the charity.
Many nonprofits recognize their limitations when it comes to raising funds and professional development firms make raising any money a possibility. Many nonprofits admit that if it weren't for these efforts they would not be generating funds (from the public). At the same time, the public generally doesn't warm to the idea that only fifty cents of the dollar they gave addresses the issues or supports the nonprofit the donor had in mind.
For me this "conflict" should serve as a reminder to nonprofit boards that one of their fiduciary and strategic roles is to approve their fundraising plan which may very well include contracting with development professionals. The strategy implications that loom large? A couple: Understanding what the cash return on investment is, and recognizing effect on image or brand. And the real strategic question: what impact would use of a development firm have on the future and future fundraising efforts / options?
To learn more about the California Attorney General's study visit the Wall Street Journal.