Imagine this. Your non-profit organization is short on funds. A former co-worker tells you she knows someone looking to give $25,000 to an organization like yours. She says, “I’ll introduce you and facilitate the process if you give me 10% of whatever she gives you. You know, a finder’s fee.” Or what about this example: Your neighbor says your organization is a perfect fit for grants being made by the federal government. He says “I’ll write the grant. If you get it, you pay me 10%. If you don’t get it, you don’t have to pay me.” What do you do?
The above scenarios might seem ideal. You don’t have to do anything, and your organization will benefit financially. You don’t have to hire staff, engage board members, or spend a lot of your own time trying to secure a gift that may or may not come through. Do you say yes, or do you try to reposition the offer?
As appealing as it may seem, both of the scenarios violate the Association of Fundraising Professionals Code of Ethical Principles. That’s right. Fundraising is a profession and fundraisers have a professional association that develops ethics and monitors adherence. In fact, there are 25 ethical standards that guide the work of raising funds for nonprofit organizations. They are grouped into four sections: Public Trust, Transparency & Conflicts of Interest; Solicitation and Stewardship of Philanthropic Funds; Treatment of Confidential & Proprietary Information; and Compensation, Bonuses & Finder’s Fees. Each year AFP celebrates and promotes fundraising ethics in October – and we hope you will take time to consider one aspect of ethical fundraising.
Ethical standard 24 from AFP’s Code of Ethics states Members shall not pay finder’s fees, commissions or percentage compensation based on contributions, and shall take care to discourage their organizations from making such payments.
Here is the reasoning. Raising funds for a non-profit is about obtaining the resources needed to advance the organization’s charitable or social mission. Importance is placed on retaining the trust of donors and ensuring that funds are used to fulfill the agreed upon social mission. Percentage based compensation and finder’s fees can give rise to betrayal of philanthropic trust in an attempt to secure a larger gift and related fee.
Also, most people don’t give because of the skill and talent of your fundraiser. They give because they had a positive interaction with someone associated with your organization, or because of a belief in your work. In the above scenarios, ask your coworker if she would volunteer to make the introduction because she believes in the value and impact of your organization. Ask your neighbor if he would write the proposal for a flat fee or hourly rate. Fundraising relies on volunteers and paid staff or contractors. It’s okay to pay fundraisers. Just don’t pay percentages.
Learn more about fundraising ethics at AFPGlogal.org.
Copyright 2022 – Mel and Pearl Shaw
Mel and Pearl Shaw position nonprofits, colleges and universities for fundraising success. For help with your fundraising visit www.saadandshaw.com or call (901) 522-8727.