Fundraising Ethics

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Sections of this topic

    The question was raised, recently, why the (ManagementHelp.Org) Library doesn’t have anything about fundraising ethics, so Carter McNamara added a subtopic heading under Fundraising, and sort of suggested that it would be a good idea to address the issue in this blog.

    This is, therefore, the first (hopefully) of a number of postings on Fundraising Ethics … the total number of postings depending on the questions/issues raised by readers.

    I don’t want to write a list of “thou-shalts,” or “thou-shalt-nots,” and I’m hoping that there will be lots of comments/questions. I’ll offer a couple of basic concepts and ask a few questions to get the discussions started, but if this is to go anywhere, it’s going to be up to you to respond.

    Fundraising ethics addresses, among other concepts, the rights of the donor, the public’s right to know, the appearance/reality of conflict-of-interest and how those issues impact the people served by the nonprofit organization.

    One concept, one reality upon which a lot of this is based, is that since nonprofits are tax-exempt organizations eligible to receive tax-deductible contributions, everyone else’s tax bill is higher to make up for the taxes that nonprofits don’t pay and for the break that donors get in reducing their taxes.

    In essence, nonprofits are publicly supported; and, as such, they are responsible to the communities they serve and to the broad public in general. Nonprofits are not private organizations; they don’t belong to any one individual, not even the individuals who create them. What NPOs do, and even what they plan to do, is (should be) open to the public.

    So, to stir things up … a few questions:
       1. Is it ethical for an NPO to hire a firm to run a carnival/fundraiser
          where the NPO realizes $10,000 it wouldn’t have had, while the
          vendor actually retains 90% of the generated income ??

       2. Is it ethical for a major donor to a hospital to get his/her child
          moved to the top of the “treatment” list ??

       3. Is it ethical for the CEO of a nonprofit to recruit family members
          to serve on the organization’s board ??

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    Have a comment or a question about starting or expanding your fundraising program? Email me at AskHank@Major-Capital-Giving.com. With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, we’ll likely be able to answer your questions.