I would like to explore some of the professional’s ethical obligations to the donors and funders. With all the excitement surrounding the decision to embark upon a fundraising campaign, it is not uncommon for an organization to focus exclusively on securing the grant or gift - and in the course, lose sight of the process that lead to the gift. What’s important to remember is that no matter the final gift, the ends never justify the means. Meaning: the means must be ethical. The financial resource development (FRD) professional must be guided by a number of basic principles. First and foremost is the way the fundraiser receives compensation. A percentage of the secured gift or grant is unacceptable. It is one thing to engage a professional fundraising firm that receives a monthly retainer for … Continue Reading
The Ethics of Fundraising: What are the Nonprofit’s Obligations?
Last week’s posting about the protocol for soliciting past and present clients elicited numerous responses - both on and off-line. In several coming postings, I will be addressing the issues of ethics and fundraising as they pertain to nonprofit organizations, fundraisers, and donors. More questions may be raised by opening this discussion and I welcome an exchange of ideas. If we begin the discussion from the perspective of the nonprofit organization there are a number of ethical obligations that warrant serious consideration. When beginning a fundraising campaign, whether it be for a capital (physical) project or for new or ongoing programs, the nonprofit needs to ensure the funds will be utilized for the purposes they are solicited. Unfortunately, all too often we hear of organizations that … Continue Reading
A List of Names is Not Enough
Recently, I had a discussion with the Financial Resource Development (FRD) professional responsible for fundraising for an organization that provides special programing for autistic children. He was bemoaning the fact that he cannot get the directors of the centers run by the organization to provide him with a list of past and present clients so that he can solicit them for contributions. A red light went off in my head when he told me of his frustration in dealing with the center directors. I immediately thought of several very important issues and possible dilemmas raised by this scenario. Although his request appears to be quite simple, it is actually very complicated and elicits a number of ethical and professional issues. The first issue that comes to mind is his requesting a list of … Continue Reading
Whose Greatness Is It Anyway?
by Michael Steiner “I have someone I would like you to meet. She is a great person, but is not yet engaged with our organization "- says your CEO. In our line of business often we receive leads about people to engage with. It may come from our trustees, board members, from our supervisor, CEO, colleagues in the organization or from another donor. What typically follows next is the “first meeting” followed by our efforts to turn a person who knows little about our organization and is neither a supporter nor a believer to a supporter and believer who sees the great things our organization has to offer. While we don’t typically think about this first meeting as an opportunity for different wherewithal, we often try to leave a strong impression which would lead into a long and lasting … Continue Reading
Responding to the Constant Need for Volunteers
I have heard countless nonprofit professionals say, “We need a volunteer to handle the job.” Often this phrase is uttered before any kind of thoughtful review process is undertaken of what is really needed by the organization. It is often easier to just assign a volunteer to a task then to think through what are the real needs and to find the most appropriate volunteer. There are a number of steps that should be implemented before volunteers are brought into the equation. The first is to clarify why a volunteer is needed in the first place. Where did the idea come from? What were the reasons why the job or task could not be fulfilled without a volunteer? What are the specific tasks needed to be performed? As soon as these questions are answered then a job description can be written for the … Continue Reading
Let’s Get Personal: The Professional – Volunteer Relationship
Have you thought about the nature of your relationship with your volunteer leaders, board members and donors? You see them at meetings and spend a few minutes speaking with them, but when thinking about moving beyond the formal relationship, what is appropriate? On one hand, you want to show that your connection is not only a functional one. On the other hand, you still want to maintain a sense of professionalism. The challenge is often finding the right recipe for an appropriate, yet personal connection within the professional working relationship. The first part of the process is getting a sense of who these people are and developing a sense of their interests. It does not mean prying into their lives and pushing yourself on them. However, it does mean getting a sense of who they are and what … Continue Reading
Is There Ever Enough Accountability?
Over the last few weeks two rather well-known organizations in Israel have been in the news over possible misappropriation of charitable funds. It is not unusual for organizations to be investigated and to have their fiscal policies and practices questioned by the Office of the Registrar of Nonprofit Organizations. However, if an organization does not have the proper structure for ensuring their being accountable for the use of public and charitable funds then this should not be a surprise. However, these situations can be avoided through the building of a proper organizational structure that provides fiscal accountability. Several years ago the media covered a disturbing side effect of the global economic crisis: with poverty rising in Israel, more children were going without enough nutritious … Continue Reading
Donor Due Diligence: A Necessary Evil
by John F. Young Charitable organizations have a responsibility to vet donors to ensure that the gifts nonprofits accept do not cause unwanted consequences in the future. When a nonprofit receives a large contribution from an unexpected source, the natural reaction is one of elation and pride in a job well done. Unfortunately, charities recently have been subjected to legal action seeking to "claw back" donations allegedly connected with unlawful activities. These claw-backs almost always result in negative publicity and can impact future fundraising activities. In today's environment, it is more important than ever for charities to understand the motivation behind a donor's gift. It is crucial to conduct due diligence of the donor, the source of funds and the effect a gift could … Continue Reading
The Challenge of Naming Opportunities for the ‘Middle Range’ Donor
What does an organization do when the donor is giving a gift of somewhere between $10 and $20 thousand? How does the organization recognize this ‘mid-range’ gift? And when a donor is contributing such an amount and requests to have their gift named after a loved one, is the nonprofit obligated to do so? In general, is there a rule of thumb for naming opportunities that are not very large donations? It is easy to set a policy that requires a minimum gift before a donation will be honored with a naming opportunity. While this is a reasonable policy, not all nonprofits have thought through this or perhaps they don’t want to alienate donors so that in the end, they might be caught off guard with the request for a naming opportunity when the gift is not considered that high. However, there is a … Continue Reading
What’s in a Name?
Last week I received an inquiry from a reader who raised an interesting question: What is the best way for an organization to recognize a generous donor? One common practice is naming a building in honor or in memory of a donor, but it comes with its challenges. The first challenge is to determine the scale that indicates the minimum that must be donated before a project can be named for someone. This is a very difficult challenging task that is compounded by the fact that the size of a donation given for the right to name a building often determines what can be requested from other donors to name rooms, large halls and other spaces in the building. At the same time, if the organization requests too high an amount for the building then they may never be able to secure the donation and that could … Continue Reading
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