Understanding the Challenge: The Fundraiser’s Ethical Obligations

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 services or to engage a FRD professional who receives a set fee for a project, however, it is unethical in the fundraising field to receive a set percentage of the funds raised as a fee for the services rendered.

For example, if a donor is told that 10% of the gift is a fee for the fundraiser who successfully solicited the contribution, I would not be surprised if they either cancelled their pledge or told the organization it was the last time they would be receiving their contribution. Why? The solicitation becomes part of a process to increase the fundraiser’s income. The implication here is that the fundraiser is seeking a larger donation for personal interests rather than the interests of the organization.

Even when a fundraiser is employed to secure contributions it is important for the professional to identify with the organization and its projects and programs. During the process of cultivating the potential donors, the fundraiser is focused on forming a trusting relationship that will lead to the closing of a gift. If the fundraiser is not convinced of the need and does not have a commitment to the organization and its services, it will be difficult to garner people’s trust and commitment.

Part and parcel of the fundraiser’s obligation to the nonprofit is to focus on building a foundation for a long-term relationship between the donor and the organization. The donor does not “belong” to the fundraiser. There are fundraisers who behave like the donor is contributing to the organization because the fundraiser recommends the organization. The fundraiser cannot operate on the principle that “today the ABC Agency is the organization of the month” and tomorrow there may be an effort to sell another organization to the same donor. The operating principle is that the fundraiser is cultivating donors solely for that organization and the donor must get this message loud and clear from the FRD professional.

FRD professionals working with nonprofit organizations often meet donors and philanthropists who want to be briefed on a variety of social issues. They may even engage the professional in a discussion so they can elicit the fundraiser’s thinking about other organizations. The FRD professional should be a resource and respond to the donor’s requests. However, there has to be a commitment to the nonprofit that first brought the fundraiser and donor together.
When the FRD person is on retainer or receives a fixed monthly salary for the fundraising services then the connection between the organization and the professional is very clear. When a person is hired as an outside consultant to engage in soliciting donors the lines can sometimes get blurred. The fundraiser has to be very clear with the organization and with the donors and funders that the best interest of the organization is the first priority.

Simultaneously, the fundraiser cannot misrepresent the organization to the donor and there must always be complete transparency. The projects and programs presented to the donor and funders have to be accurate. If and when projects are cancelled and priorities are changed then the donor has to be informed. It is the fundraiser’s obligation to report these changes and it is the donor’s right to decide whether to provide the funding or cease funding.

For example, the XYZ afterschool program created a seminar on sexuality for high school girls. The Upper City Women’s Foundation provided funding for a 12-week seminar, however, it later became clear that the girls were only willing to commit to six weeks and with some encouragement they agreed to eight weeks. The agency’s FRD professional did not think it would matter to the Women’s Foundation and once I raised the issue with the director and the fundraiser, they decided to inform the Foundation about the funding for the entire budget.

The fundraiser should have been the first person to recognize that any change in the original plan – even if it hasn’t been firmed up – must be taken to the donor as a matter of course. In this case, the fundraiser thought he was acting in the organization’s best interest by not cancelling the program. In doing so, he would have been placing the agency in a vulnerable position because the Foundation might have been upset with the change in the number of sessions.
After a discussion with the Foundation representative, in which the reasons for the change in the program were discussed, they were able to implement the revised program with full funding. In fact, the Foundation was impressed that the issue was brought to their attention and in the letter confirming the funding, they complimented the Foundation for using their initiative in raising the question.

The FRD professional has a number of ethical obligations to both the organization that employs them and to the donors and funders they approach for support. By fulfilling the ethical obligations of the role, they not only enhance the status they have in the eyes of the organization, but in the eyes of the donors, as well. In the philanthropic sector, there is nothing more valuable than to be perceived as an ethical professional with a good name. For the professional fundraiser, serving the donors and the organization in the best way possible ultimately also serves himself.

Stephen G. Donshik, D.S.W., is a lecturer at Hebrew University’s International Nonprofit Management and Leadership Program and has a consulting firm focused on strengthening non-profit organizations and their leadership for tomorrow. Stephen is a regular contributor to eJewish Philanthropy.