Fundraising Ethics (or Why My Grandmother Was Right!)

By Phil Stolberg, BDI Chief Operating Officer

When you think of the word ethics, what comes to mind? Or more specifically, I should ask, what do you think is the critical role of ethics as it relates to nonprofit fundraising and our relationship with donors?

Here’s Webster’s definition: “Moral principles that govern a person’s behavior or the conducting of an activity.”  

And my grandmother’s definition: “The only option in life is to always do what is right and honest and fair.”

While they’re both valid, what I’ll always remember are the wise words my grandmother taught me and how they continue to influence everything I say and do. 

In our fundraising and marketing world, ethical behavior must always build trust with the nonprofit’s donors and community. It must be the compass that guides all our interactions and continually builds upon itself so we don’t destroy relationships with our donors and community. 

Yet, when navigating day to day fundraising expectations, it is sometimes difficult to define ethical and unethical behavior.

Our world is complicated… and motivations, circumstances and practical realities often make it challenging to distinguish between ethical and unethical behavior in every situation. That said, anything that is dishonest, corrupt, misleading and untrustworthy is always unethical. 

Those of us serving philanthropic causes must constantly, every moment of every day, hold each other accountable. We must continually question our motivations and actions and solicit insight, questioning and counsel from our industry colleagues.  

So how do you define what is and isn’t ethical in fundraising?

Often, subjectivity and situational realities confront us with difficult dilemmas as we’re evaluating and interpreting our actions and behaviors. Having training and set guidelines in place regarding real life fundraising ethics can help bring clarity and objectivity to our actions and behaviors.  

Here are a handful of questions you might be considering as you strive to ensure your organization’s actions are ethical and trustworthy:

  • Is it always ethical to use real life case histories or stories when promoting our nonprofit’s case for support? 
  • Is it ethical to share composite/generic stories?  
  • If only real stories, when is too much information potentially harmful and hurtful?  
  • What, when and how must the privacy of those in the case history be protected?  
  • Is it ethical or unethical to encourage support for a worthy cause when the nonprofit is mistreating its staff and volunteers? And what is the definition of “mistreating”? 
  • Is it ethical to encourage financial support of a nonprofit that is on the verge of bankruptcy? 
  • Is it sometimes acceptable behavior to stretch the truth when defining a worthy cause? For example, is it acceptable to report “thousands of hungry people fed” when the actual number was 2001?  
  • Or… fill in the blank with your own concerns, as there are countless other circumstances that challenge our consideration of what is and is not ethical in fundraising.

What are some best practices to establish as your ethical fundraising foundation?

There’s no question that defining what is and is not ethical behavior can be complicated. So here are a few practical best practices to help you and your nonprofit organization “always do what is right and honest and fair”:

  • Leadership must always demand total and uncompromised honesty.
  • Everyone in the organization – not just the fundraisers – must have a comprehensive understanding of the organization’s mission, values, programs and services.  
  • Donors, volunteers, partners, vendors and recipients of the nonprofit’s programs and services must be encouraged to ask questions. Each audience should expect to receive clear, transparent and accurate information – in a timely manner, every time.
  • Readily and quickly share financial information. But not at the detail that might compromise the privacy of staff or program recipients or breach data security protocols. If there is information that should not be shared, with candor share why not.
  • Always be clear about the cost of fundraising, as well as the cost of programs and services.
  • Never accept a designated gift where the donor’s designated intentions cannot be honored.
  • Be aggressively passionate and proud when describing the fundraising cause or offer… but never overstate, embellish or make a promise that cannot be fulfilled.
  • Be open and transparent with every potential conflict of interest.
  • Never share case histories or stories or photos without the program participant’s permission. And if the participant is a minor, never feature him/her without the express consent of the minor’s parent or guardian.
  • Always honor a donor’s or program participant’s desire to remain anonymous.

This listing of best practices is only a starting point. I hope it will provide a starting point for you as you evaluate and expand upon this list to meet your organization’s needs. Make it a point to train and retrain all staff and volunteers on this list so there is a clear working knowledge of all your ethical code of conduct expectations.

What resources are available to help you define your own ethical code of conduct?

I encourage you to check out the Ethical Code of Conduct as defined by the Association of Fundraising Professionals (AFP). If you are a member, revisit this code each year when you renew your membership.

And if you’re not a member, I encourage you to consider joining. AFP serves fundraising professionals and our world of philanthropy with counsel, education, research and advocacy. The Association champions trust and ethics in all areas related to charitable giving… such as donor relations, data, compensation, privacy and more.

As you assess your organization’s code of ethics, keep these considerations and questions in the forefront of your mind to ensure that you are always building trust with your donors and the community. And as you have opportunity, begin to codify these expectations and share with your whole team so that they’re also aware. When you do, you’ll find that your organization will naturally behave, in the wise words of my grandmother, right and honest and fair. 

Check out last week’s Quick Shot “Boost your team! 4 Tips for Employee Appreciation”

  • Chief Operating Officer

    Phil Stolberg, Chief Operating Officer

    With over 40 years of experience in marketing and communications, BDI’s Chief Operating Officer, Phil Stolberg, has dedicated his career to working with not-for-profit organizations. He has held a variety of leadership positions, both with nonprofit organizations and with agencies that consult with the not-for-profit world, allowing him extensive experience with marketing, major donor and capital campaigns, special event and foundation fundraising.

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