Fundraising success depends on having a good cause. It also requires that fundraisers do things the right way. But, none of that is enough. To successfully raise money, fundraisers must also avoid making costly mistakes, either unknowingly or (and you would never do this, right?) knowingly.
Making mistakes can cause your organization to lose donors and have a difficult time finding new ones. In some cases, one charity’s mistakes can harm the reputation of the entire nonprofit sector causing even innocent organizations to lose support.
Philanthropy researchers have shown us that the more someone trusts a nonprofit organization, the more likely they are to give. Furthermore, the more they trust a charity, the more money they are likely to donate. A report issued by Independent Sector stated:
The public is demanding a greater demonstration of ethical behavior by all of our institutions and leaders ….To the extent the public has doubts about us, we shall be less able to fulfill our public service.”
In short, trust affects both propensity for giving and the amount given. Those who have a high confidence in charities as well as believe in their 
honesty and ethics give an average annual contribution of about 50 percent more than the amount given by those sharing neither opinion.
You can read more about the research into trust and philanthropy in an article I wrote a number of years ago for the International Journal of Nonprofit and Voluntary Sector Marketing.
For the Association of Fundraising Professionals Ethics Awareness Month, I wrote a feature article for the October issue of Advancing Philanthropy magazine: “Ethics, Fundraising, and Leadership: Avoid the Seven Deadly Sins of Fundraising.” As I pointed out:
You’re a good person. At the very least, you try to be a good person.
However, that’s not good enough. Effective fundraising demands more of us. Every action we take, no matter how small or large, has the potential to build or erode public trust, which could have a corresponding impact on philanthropic support.
Among other things, being a fundraising professional means you must always strive for excellence while avoiding missteps that could have costly consequences for you and/or your organization. Fortunately, you do not have to endure risky mistakes to learn from them. Instead, thanks to media headlines, you can learn from the mistakes of others.”
In the AFP article, I discuss seven missteps made by real charities. While there are certainly more than seven deadly fundraising sins, my article highlights common issues of concern. For example, conflicts of interest was rated among the top ethical concerns of fundraisers, according to a recent AFP survey. In my article, I explore this issue citing a real-world example:
A nonprofit organization in the United Kingdom was accused of awarding a lucrative contract to the husband of a senior staff member. Because of the accusations, the nonprofit drew harsh words from members of parliament and the media.
After an investigation, the U.K. Charities Commission found that no conflict of interest existed. While this was good news for the nonprofit, it’s doubtful the ruling has completely restored the public trust.
The AFP Code of Ethical Standards demands fundraisers and organizations avoid misconduct. Furthermore, it requires avoidance of even the appearance of misconduct. While a real conflict of interest can result in a loss of support, as well as legal sanctions, simply the appearance of a conflict could be sufficient to erode public confidence, and therefore, support.
Charitable organizations should implement policies and procedures that cover real conflicts of interest as well as the appearance of conflicts, and they should apply to both the governing board and staff. An effective set of policies and procedures will protect an organization by defining “conflict of interest,” identifying the classes of individuals within the organization covered by the policy, facilitating the disclosure of information that may help identify conflicts of interest, and specifying procedures to be followed in managing conflicts.
Once policies and procedures are created, the organization’s governing board should formally adopt them. For the measures to be truly effective, senior management should review the conflict policies and procedures with the board and staff to ensure understanding. Periodic reviews or training sessions will help people understand the ramifications of conflicts and how to avoid them.”
You can find my full AFP article and discover the other six deadly fundraising sins by clicking here.
Mark Twain, the great American author and humorist, once said:
Always do right. This will gratify some people and astonish the rest.”
My hope, my wish, is that you will do everything in your power to be an astonishing fundraising professional.
What are the big ethical challenges you have faced or are facing now?
That’s what Michael Rosen says… What do you say?
Michael Rosen Says... 