Joint Activities Criteria

What are joint activities? If you have a mailer that is providing mission related material to your mailing list and on the back of the flyer is a request for donations (those little  check-boxes that encourage $75, $100, $150 pledges), that mailer is possibly a joint activity (also referred to as joint cost). Other joint activities might include special fundraising events that also function as member drives or serve educational or awareness purposes. Joint activities can create some accounting confusion in terms of how to allocate the expenses between program and fundraising.

Organizations need to familiarize themselves with the three criteria that must be met in order to break out some of the costs as program related. If any of the criteria are missing then the cost should be considered 100% fundraising, even the costs that are otherwise identifiable as program. This could skew a number of organization’s expenses if they aren’t careful. Groups that must maintain certain ratios of fundraising to program costs may find themselves in trouble if their mailers get reviewed and are found to fail any of the three criteria which are as follows:

PURPOSE

• Does the activity accomplish program or mission goals while also making appeals for contributions? In other words, would the organization be doing this even if the appeal was not included? Appeals may come in the form of providing pre-addressed envelopes back to the organization along with suggestions of amounts to contribute. It may also appear as charity auctions and other fundraising campaigns. The activity should be similar to other program components in both medium and intent. In order to pass the purpose criterion, the activity should help further your mission in the same manner that your program activities do. There should be tangible evidence of the intended purpose.
• If an entity has a way in which to measure and evaluate results of the activity the results of which are more significant to the program than the fundraising, this is a good way to ensure the purpose criterion is met.
• If the majority of compensation or fees for any person involved in the event, internal or external to the organization, vary based upon the level of funds raised, the activity automatically fails the purpose criterion. If you have hired a professional fundraiser to plan the event, you likely have a purely fundraising event to record.

 AUDIENCE

• The recipients of the mailer or attendees of a special event are your audience. The audience must have a need or reasonable potential need for the actions of your call to action.
• The audience must have the ability to make the actions that assist in meeting program goals.
• If your audience is exclusively prior donors or people selected specifically based on their likelihood to donate will not pass the audience criterion. There should be sufficient other reasons for including these individuals that outweigh their potential to contribute.

 CONTENT

• Does the activity include a “call to action” that encourages the individual to some level of involvement. Requests for contributions do not constitute a call to action. Education about your organization’s cause, needs, or concerns cannot be considered a call to action unless the action is of specific benefit to the audience or society at large. An example would be a cancer related group sending a mailer out that contains information about types of good cancer-fighting foods and their benefits. It could also be a recommendation to see a doctor if you experience certain symptoms or suggestions on how to quit smoking. In some cases the call to action may be implicit, such as educating about the harmful effects of smoking serves as implicitly encouraging the audience to stop smoking. The benefits should be apparent or otherwise explained. An example of what would NOT qualify as a call to action would be if this same cancer group sent a mailer out that contained descriptions of the types of research in which the organization is involved. A report of the organization’s recent events would also not qualify.
• The content must be unrelated to making contributions to the organization and must be consistent with the program’s general objectives.

If your activity in question has passed all three criteria, the costs can be allocated across program and fundraising. Methods for determining amounts to allocate are varied but should be reasonable and consistently applied. If any of the three criteria are failed or can’t be sufficiently substantiated, then all costs associated should be allocated fully to fundraising.

All parts of production of the mailer should be considered in your allocation, including the envelope, design & printing costs, inserts, response cards and postage, likewise with all of a special event’s costs.