$255,000 for a dinner with Bill Clinton

After several attempts of Obama’s government to lower the income tax deduction for charitable giving, non-profit organizations such as hospitals and educational institutes, which largely depend on generous gifts from affluent donors, are bracing themselves for the upcoming devastation. In difficult times like this, non-profit organizations have to get themselves lean and mean to find new ways to incentivize people to open their wallets. Since the government is eliminating an important motivation for wealthy philanthropists to donate a huge sum, non-profit organizations have to make up for it, hence initiating a challenging competition between these organizations.

One of the websites that successfully promoted its charity service is Charitybuzz.com—an online auction house that offers once-in-a-lifetime experiences to raise money for noteworthy causes. Unlike other charity websites that let their users pick a cause of their interest and donate money accordingly, Charitybuzz holds auctions on a dinner with celebrities, concert tickets, makeovers, art works, internships and even extra roles of popular TV shows such as How I met your mother. Thus it not only attracts wealthy donors but also encourages people who previously weren’t interested in donation to be a part of charity work. Due to its interesting approach to social good, this website raised more than $25 million in 2011 alone and more and more non-profits are becoming its partners.

The most popular service out of all is the celebrity section. Debbie McLeod, an executive director of Grant Me the Wisdom Foundation—which aids women and girls in developing nations—has paid $255,000 to spend the day with Bill Clinton. Her bid was twice the amount to meet Oprah Winfrey. The money collected was donated to Clinton Global Initiative.

Here is a list of top 10 celebrities who were sold for highest price and the organizations where the money was donated to.

Bill Clinton: $255,000 to Clinton Global Initiative Oprah Winfrey: $105,000 to RFK Center for Justice and Human Rights Elton John: $100,000 to Natural Resources Defense Council Rupert Murdoch: $85,000 to the Global Poverty Project Paul Simon: $75,000 to the children’s Health Fund Paul McCartney: $70,000 to GREEN Schools Initiative Green Ross: $70,000 to Peace Corps Karl Lagerfeld: $65,000 to Runway to Green Harrison Ford: $65,000 to Conservation International Howard Stern: $55,500 to Rosie’s Theater Kids

Critics’ response differed greatly on Charitybuzz’s success. Mike Colling, a managing director of marketing agency MC&C, applauded the idea by saying, “Any charity representing itself as competent in the execution of this service should be prepared to substantiate this.” He also added, “This will accelerate the trend for charities to benchmark Despite its effective strategy to promote donation, some people doubt its possible effect on other non-profit organizations that are partners of Charitybuzz. On the other hand, Richard Hill, a strategy director of marketing agency at Touch DDB, argued, “By raising the issue of one charity being more efficient than another, we’d risk making donors question the efficiency of charity spending more generally, which might put them off donating. It could also force charities to spend more on advertising in order to defend their positions, which many donors will see as a waste of money.” Adrian Sargeant, Professor of fundraising at Bristol Business School also agreed. “This is a bad idea, such advertising could backfire, and I suspect such cherry-picking may also prove unlawful.”

The debate on Charitybuzz’s tit-for-tat strategy is worth thinking about. If non-profit organizations are to compete for the donor’s money, is it fair that they come up with innovative but not completely altruistic ways to attract users?

What do you think?