Promoting Your Organization's Success by Embracing the Ethics of Fundraising

For most not-for-profit organizations, fundraising is a crucial part of your continued success. At Deffet Group, we know how important this aspect of planning is, and we’d like to offer you some suggestions on how to make sure those who carry out your fundraising efforts are adhering to a code of ethics that will encapsulate your commitment to securing donors who see your commitment to following that code.

First of all, make sure all involved are aware of the many excellent support organizations that are out there to offer guidelines and help, such as the Association of Fundraising Professionals, Council for Advancement and Support of Education, and the Association for Healthcare Philanthropy. The codes of fundraising practice are written primarily for practitioners. However, they are for everyone to know and understand, including your board members and donors. Making sure everybody is familiar with what should be considered basic ethical principles in fundraising will help you foster an environment in which ethical behavior by all parties involved will not only be accepted, but also, further encouraged and strengthened.

Another important part of maintaining ethical practices in your fundraising procedures is to make sure that all donors have access to the Donor Bill of Rights, which lists 10 basic practices designed to make sure that philanthropy is worthy of the respect and trust of the general public and to raise existing and prospective donors’ confidence in your nonprofit organization. For your convenience, we’ve included the body of it here, but it is also available on the Association of Fundraising Professionals’ website at: www.afpnet.org/ethics.

The Donor Bill of Rights

Philanthropy is based on voluntary action for the common good. It is a tradition of giving and sharing that is primary to the quality of life. To ensure that philanthropy merits the respect and trust of the general public, and that donors and prospective donors can have full confidence in the nonprofit organizations and causes they are asked to support, we declare that all donors have these rights:

• I. To be informed of the organization’s mission, of the way the organization intends to use donated resources, and of its capacity to use donations effectively for their intended purposes.
• II. To be informed of the identity of those serving on the organization’s governing board, and to expect the board to exercise prudent judgment in its stewardship responsibilities.
• III. To have access to the organization’s most recent financial statements.
• IV. To be assured their gifts will be used for the purposes for which they were given.
• V. To receive appropriate acknowledgement and recognition.
• VI. To be assured that information about their donation is handled with respect and with confidentiality to the extent provided by law.
• VII. To expect that all relationships with individuals representing organizations of interest to the donor will be professional in nature.
• VIII. To be informed whether those seeking donations are volunteers, employees of the organization or hired solicitors.
• IX. To have the opportunity for their names to be deleted from mailing lists that an organization may intend to share.
• X. To feel free to ask questions when making a donation and to receive prompt, truthful and forthright answers.

Another step you can take is to link your organization’s website to the code of ethics that you follow. Assure your donors that you adhere to a code of ethics, and invite them to review it and to seek you out with any questions they may have. This lets them know that not only are you ethical in your fundraising practices, but that you are an organization to which ethical principles overall are a primary part of your vision. This can help alleviate any hidden concerns they may be feeling about potential controversies or your organization’s reliability and reputation.

Finally, make sure that your leadership is familiar with and following some basic principles of ethical decision making. A good rule of thumb is, of course, what is commonly known as “the golden rule.” In every important decision-making situation your leadership finds itself, suggest they preface it by asking themselves the following questions: Would I want to be treated this way? Would I be comfortable seeing my decision on the front page of the newspaper? In addition, the following question should be asked: Will any single individual profit from the organization in this decision? As Elizabeth Schmidt, who teaches Nonprofit Law and Practice at the College of William and Mary Law School points out in her excellent article, “How Ethical is Your Nonprofit Organization?” losing sight of this basic principle is what has led to many of the scandals that have been publicized concerning organizations in the nonprofit world. What follows is a truncated version of her suggestions from the article, which is available in full at:
www2.GuideStar.org.

Key Principles for Success

Honesty: Being honest is probably the most obvious ethical principle. But it’s also the one that can most quickly damage your organization’s reputation. All nonprofit organizations need to consider the truthfulness of their statements, avoid exaggerations and statements that have an air of untruth, and recognize that omitting a statement can be the same as telling a lie.

Openness: Parallel to honesty is transparency. Nonprofits can maintain the public trust by being particularly open about their operations. By law you must make your Form 990 available to the public, but you can and should do more to let the public know about your organization.

Your Web site and your fundraising appeals should clearly articulate your mission, values, scope of activities, and uses of revenue. You should also release audited financial statements and your annual report, if you have them. Your CEO or executive director and board should be fully informed about the organization’s finances, and their reports to the public should be scrupulously honest and consistent.

Conflicts of Interest: Conflicts of interest appear with regularity in the nonprofit sector. Board members are often chosen because their professional abilities can provide a service to the nonprofit. Moreover, they are likely to be involved with several boards in the same community. Volunteers, employees, and even clients can also face conflicts of interest. Make sure that if a board member can provide a service, and that your organization determines both legally (be sure to research your state’s law concerning this) and morally that it is acceptable to have a board member do so, that the conflict is fully disclosed and the conflicted person does not vote on whether he or she should provide the services.

Privacy: Some types of nonprofits have always been particularly sensitive to privacy issues. Medical organizations, for example, must protect patient confidentiality, and libraries fiercely guard their patrons’ information. The rest of us should also consider whether to protect our clients’ and customers’ privacy, even when the fact that they use our services is less sensitive.

Donor lists create their own privacy issues. Although many nonprofits rent or sell their donor lists without asking the contributors’ permission, codes of ethics increasingly forbid doing so without at least giving the donor the ability to remove his or her information from such lists. The Internet adds another layer to this discussion, as donor addresses, credit card numbers, and other personal information can easily be sent to many unscrupulous people.

Treating employees, volunteers, and clients with respect: Finally, it should go without saying that employees, volunteers, and clients should be treated with respect. Nonprofits should never engage in discrimination or harassment. These are not difficult ethical issues; unfortunately, they are sometimes difficult for ordinary humans to follow.

In conclusion, fundraising is an important part of philanthropy. Service and giving are considered their own best rewards, and the concept of philanthropy is central to an American way of life—it is considered by many to be the heart of our liberty. Your organization’s commitment to ethical fundraising in an effort to continue your good work is to be admired. We hope this information helps you safeguard your excellent organization’s reputation as you endeavor to achieve continued growth through this vital means of your successful development.

Note: For an extensive list of reading resources concerning the ethics involved in fundraising, you may want to consult Foundation Center’s list of books and articles available at: www.FoundationCenter.org.