Help donors feel good about giving
Nonprofits need to pay attention to ethics, especially when it comes to fundraising. Without clear fundraising ethics, you could quickly lose community trust and fail your beneficiaries.
Begin with trustworthy fundraisers
To practice ethical fundraising, you need trustworthy fundraisers. To make sure they go about their work ethically, treat fundraisers with respect and invest time in training before they solicit a single donation. For example:
- Help fundraisers understand and articulate your organization's mission
- Set guidelines for what fundraisers should disclose about your organization's work
- Make sure fundraisers know and comply with all applicable laws
Insist on honesty
Fundraisers need to know that their solicitations and any materials they provide about your organization must be honest. Enforce a zero tolerance policy regarding intentional misrepresentation and misinformation. Fundraisers should never deal in or exploit donor or prospective donor information.
When doing face-to-face fundraising, it's important for fundraisers to clearly identify who they are and which organization they represent. Donors should feel free to ask questions and receive forthright and accurate answers.
Stress financial transparency
Show a commitment to ethical fundraising by being transparent with your organization's finances and fundraising practices. Make it easy for visitors to find this information on your website. Share details about your board composition, programs, outcomes, staffing and how donations are spent.
Keep in mind that it is not appropriate to compensate a fundraising professional or other staff member based on a percentage of money raised. Donors who contribute to a nonprofit expect to see that money go to the organization.
Similarly, do not misstate your fundraising expenses. Underreporting fundraising expenses only perpetuates unrealistic expectations about nonprofit overhead costs.
Respect your donors
To show respect for donors, be sure to:
- Conclude face-to-face approaches politely and immediately upon request
- Send timely gift acknowledgements
- Respect any restrictions a donor may place on a gift
- Provide timely reports to trusts and foundations
- Ask how donors wish to be acknowledged (such as on your organization's website or in the annual report)
Establish a code of ethics
A code of ethics can be a useful tool in guiding your staff and volunteers to practice ethical fundraising.
The Code of Ethical Standards from the Association of Fundraising Professionals (AFP), for example, states that a fundraiser aspires to build personal confidence and public support by being trustworthy, practicing honesty in relationships, and being accountable for professional, organizational and public behavior. Members of AFP, an organization that promotes ethical and effective fundraising worldwide, must observe the code or risk being denied membership.
The Ethics and Accountability Code from the Pennsylvania Association of Nonprofit Organizations (PANO) states that an organization's fundraising program should be maintained on a foundation of truthfulness and responsible stewardship. The code also says that fundraising policies should be consistent with an organization's mission, compatible with its organizational capacity, and respectful of the interests of donors and prospective donors.
Similarly, the Code of Fundraising Practice outlines standards for charitable fundraising organizations across the U.K. The code, which is enforced by the Fundraising Regulator, states that fundraising organizations must be legal, open, honest and respectful — and must not place undue pressure on a person to donate.
Curb aggressive tactics
No matter how ethical your fundraising practices are, your organization isn't likely to raise much money unless your fundraisers are assertive in promoting your cause confidently and directly. That means reaching out to the community to explain why your organization is great and encourage donors to support your cause.
However, it's possible to approach fundraising too aggressively. For example, putting too much urgency in your appeals for money may cause donors to question whether your organization is well run or even on the verge of closing — not exactly donor draws. If your organization is too focused on money, your mission and purpose also might get lost in the mix.
If you receive a complaint about your organization's fundraising practices, don't hesitate to respond. Record details of the complaint as well as contact information for the person lodging the complaint. Then, take quick action to determine what happened — and prevent it from happening again.
Think of donors as investors
Fundraisers must work hard to convince donors to invest in your organization. Use positive marketing and share stories of your successes to help people feel good about giving. Then, use your ethical practices to make the most of it.
Association of Fundraising Professionals: Code of ethical standards
Association of Fundraising Professionals: Donor bill of rights
Fundraising Regulator: Code of Fundraising Practice
National Council of Nonprofits: Ethical fundraising
The Pennsylvania Association of Nonprofit Organizations: An ethics and accountability code for the nonprofit sector (2016)
The Fundraising Authority: The entrepreneur's guide to non-profit fundraising by Joe Garecht
Nonprofit Bridge: 9 fundraising mistakes your nonprofit is making by Kristen Gramigna (2014)
Non-Profit Chas: Aggressive fundraising, transparency, and the worst case scenario by Chas Grundy (2010)
NonProfit PRO: 'Cheerfully aggressive' fundraisers? by Gail Perry (2014)
GuideStar: How ethical is your nonprofit organization? by Elizabeth Schmidt (2004)
Psychology Today: How to be assertive, not aggressive by Lynn Taylor (2013)
Association of Fundraising Professionals: Values promoted by the AFP code of ethics
GrantSpace: Where can I learn about ethics in fundraising?