Blog: Fundraising for Nonprofits

That was the subject line in a recent email in which the writer asked:

“We have a skilled fundraiser who wants to do an event for us. She is willing to do it for 10% of profits after expenses. She is passionate about our cause and has worked hard for us for a couple of year — often at her own expense — to promote other successful, but, much smaller events.

“To do this big event she wants to get paid…and I can understand that, as it will be a big undertaking.

“Seems we won’t have any risk involved. We know her, we trust her and if we don’t make any money then she won’t make any money. Is there something I’m missing, or do you think under these circumstances this could work ok?”

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I responded that I’ve always believed in and adhered to the “rule” that no consultant/vendor to a nonprofit organization should be compensated based on a percentage of funds raised. (There’s good reason for that “rule,” and AFP has a comprehensive “white paper” discussing the issue — AFP Ethics Paper.)

So, not to repeat what you can read in that document….

In essence, a nonprofit organization should be able to afford/pay for the services of any consultant/vendor that they engage. If they can’t afford it, they shouldn’t be doing it !!

All consultants/vendors should be able to put a dollar price on the time/effort/services they provide … a price that reflects the current “market.” And the consultant and the organization should come to an agreement (contract) as to the specific dollar figure and how it is to be paid.

I understand what you said about your “skilled fundraiser” being passionate about your cause, about having worked for you in the past, and having given of her time and resources. That was her choice — commendable, but her choice.

Let me use an exaggerated example to advocate for not compensating on a percentage basis. If your event raises $11,000,000 at a cost of $1,000,000, then the consultant will get $1,000,000. How can you possibly justify giving a consultant that much money … money that could do so much good for your constituents ???

Using the same percentages on a smaller scale doesn’t justify using money that people give to you to help the people you serve, to instead compensate a vendor/consultant.

And, by-the-way, you refer to this person as a “fundraiser,” but describe her as an Event Planner/Organizer/Manager. Those two titles do not usually equate … unless she is actually raising the money for you.

If she is raising the money for you, there is not likely a relationship between the ticket purchasers and your organization; and what an NPO must have to ensure future funding is a relationship with those who support that organization.

That you believe you would go into the proposed relationship with no risk cannot be a justification for unethical behavior — as per the “rule.” And, there is a risk you haven’t considered: What if your community/constituents/local newspapers find out about a consultant/vendor getting so much money from your organization that could have helped lots of people !!??

In addition, I get the impression from your note that your organization does (has done) smaller events as “fundraisers.” “Fundraisers” don’t result in ongoing donors … people you can count on for support over the long term.

For my reaction to “fundraisers,” let me refer you to two early postings on my blog:
Fundraising Or Not Fundraising, That Is The Question
“Development” Is Not A Synonym For “Fundraising”

You should know, the above is a compilation of comments from both my wife and I.
I looked at your question from the perspective of a fundraising professional, and she from the perspective of a long-time Special Events Planner/Organizer/Manager.

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Have a comment or a question about starting, evaluating or expanding your fundraising program?
Contact Hank 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, he’ll be pleased to answer your questions.