This is an update/revision of a posting that appeared in October, 2010
In my 30+ years as a fundraising consultant, I’ve seen corporate fundraising done by staff and/or volunteers, with a consultant advising/teaching/guiding; and, I’ve seen a “consultant” doing the fundraising from the corporations on behalf of the NPO. In both cases, it always created a conflict of interest if the consultant was to be compensated on a commission/percentage basis.
In the first circumstance, the relationship is between the NPO and the corporation. The consultant may make the initial contact with the corporation, but the discussions are between the NPO family and the corporate people. In this case, the consultant actually consults. S/he is paid for her/his time/effort/expertise, with no consideration as to how much money the NPO may or may not raise.
In the second scenario, the relationships are between the “consultant” and the corporations, and the “consultant” does little or no consulting. In this case, the “consultant’s” role is to “show” the corporation how their support of the NPO will benefit that corporation. Again, the “consultant” should be compensated on the basis of the time/effort/expertise that goes into making “it” happen, not on a percentage/commission basis.
Many corporations (especially those who are frequently asked to support NPOs) are aware of the “rule*” (see * below) prohibiting commission/percentage compensation for those raising money for a non-profit organization. Many of those corporations agree with and accept that concept. Some don’t!! Some don’t care!! The question is whether you want to risk appearing ignorant of “accepted practice” and/or seeming not to care??
There is, of course, a third option, one in which the consultant/event planner working with you on your organization’s event has the relationships, the ability and the willingness to contact and solicit corporations to get them to buy tables or sponsorships. Where this person is usually paid a flat fee for their event planning work, s/he may (not) take an additional fee for this work … and may simply use the opportunity to cement their own relationships with the nonprofit organization and the corporation(s).
Always remember, once the consultant/planner has created the relationships for you with the corporations, then it is up to you, the NPO, to follow up to use this introduction wisely. Depending on others to continue to garner corporate support for you shows a lack of “how-to” in developing relationships/partnerships. The consultant who brings the corporations to the table (so to speak!) has given you a gift. What you do with it is up to you.
(*Conflict-of-Interest issues tend to become public information, and have hurt many nonprofits and their ability to raise money. It is, therefore, with good reason, that all of the major associations of nonprofit organizations and those of charitable-fundraising professionals accept and endorse this “rule.”)
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Have a comment or a question about starting, evaluating or expanding your fundraising program? With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, I’ll be pleased to answer your questions. Contact me at AskHank@Major-Capital-Giving.com
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Hank Lewis with Development Consultant Associates has over thirty years as a fundraising consultant and is a specialist in Board and Leadership Development, Capital Campaign, Bequest Program and Major Gifts.