Archive for ‘Ethics’

October 13, 2020

Avoid Costly Mistakes and Raise More Money

A traditional formula for fundraising success involves having the right person ask the right person, in the right way, for the right gift, for the right project, at the right time. Another way for you to raise more money for your nonprofit organization is to avoid making mistakes that could prove costly by putting potential support in jeopardy.

The public’s trust in the nonprofit sector has been on a steady decline over the past several years. At the same time, the number of charity donors has been decreasing.

So, what can we do to rebuild donor confidence, and inspire much-needed support?

I’ll answer that question in a FREE webinar hosted by the Association of Fundraising Professionals – Delaware, Brandywine Chapter. Here are the details:

Avoid Costly Mistakes & Raise More Money

  • Date: Wednesday, October 28, 2020
  • Networking Time: 9:30 AM to 10:00 AM (EDT)
  • Program Time: 10:00 AM to 11:15 AM (EDT)
  • Audience: This webinar is open to AFP members and non-members everywhere.
  • CFRE Credits: This webinar qualifies for 1.25 CFRE education points.

During the webinar, I’ll cite real-world examples to identify seven common fundraising mistakes that can prove costly to your organization. You will get simple tips for avoiding those mistakes, and you will receive a decision-making model to help you avoid or minimize countless other pitfalls.

By avoiding mistakes and more consistently making solid decisions, you will be able to enhance the confidence that the public has in your organization and, therefore, you’ll raise more money.

August 14, 2020

Will Move to Dissolve the NRA Hurt Your Nonprofit?

This post is about the attempt of New York’s Attorney General to dissolve the National Rifle Association. However, this is NOT a political post. Whether or not you support the NRA, the legal fight over its future has potential implications for your nonprofit organization. Let’s take a closer look.

Doug White, a philanthropy advisor, author, and teacher, writes:

In a 169-page document made public earlier today (you can read the entire lawsuit here), [New York Attorney General] Letitia James alleges that NRA insiders have violated New York’s nonprofit laws by illegally diverting tens of millions of dollars from the group through excessive expenses and contracts that benefited relatives or close associates. The suit alleges that longtime CEO Wayne LaPierre and three other top officials ‘instituted a culture of self-dealing, mismanagement, and negligent oversight at the NRA,’ failed to properly manage the organization’s money and violated numerous state and federal laws.

The lawsuit asks for a dozen measures to be taken. The first one: ‘Dissolving the NRA and directing that its remaining assets and any future assets be applied to charitable uses consistent with the mission set forth in the NRA’s certificate of incorporation.’”

White further notes that the legal action has been filed against the 501 (c)(4) organization, and not against any 501 (c)(3) organizations related to the NRA.

So, how could the case of the NRA affect your nonprofit organization?

Erosion of Public Trust: The mere accusations against the NRA, whether or not they are ultimately proven in court, have the power to not only erode confidence in the NRA, they have the potential to erode trust in all nonprofit organizations. If that happens, it could make fundraising more difficult. A special report in 2018 from the Better Business Bureau’s Give.org found:

While the majority of respondents (73 percent) say it is very important to trust a charity before giving, only a small portion of respondents (19 percent) say they highly trust charities and an even smaller portion (10 percent) are optimistic about the sector becoming more trustworthy over time.”

Enhancement of the Public Trust: On the other hand, New York’s action could enhance the level of trust people have in the nonprofit sector. If the Attorney General can prove her case, it would show the public that government officials are exercising appropriate oversight of the nonprofit sector which could elevate the public’s confidence that their donations to any nonprofit will be used appropriately. We know there is a correlation between the level of trust people have and the likelihood they will give as well as the amount of their giving.

Impact on Support to Controversial Organizations: If New York succeeds in liquidating the NRA, it will have the power to disburse the organization’s assets as it sees fit. How will this affect support to other controversial nonprofits if donors know that their donations could be redistributed by the state? It’s possible that this could result in more cautious behavior by donors.

read more »

August 11, 2020

What Can You Learn from the Moral Failing of the NAACP?

While the recent moral failing of the National Association for the Advancement of Colored People (NAACP) is distressing to all who oppose bigotry, the situation offers seven important lessons for every nonprofit organization.

Before I get to those critical lessons, let me offer you some background.

It’s been 75 years since the liberation of Auschwitz-Birkenau as well as the other concentration and extermination camps run by the Nazis to murder Europe’s Jewish population and others. Now, three-quarters of a century later, liberals and conservatives continue to find common ground by embracing anti-Semitism.

For its part, the NAACP has failed to fire Rodney Muhammad, President of the NAACP Philadelphia chapter, following his anti-Jewish social media posting in defense of anti-Semitism. The NAACP headquarters has not apologized for Muhammad’s comments, nor has it insisted that he apologize. Nationally, the NAACP’s inaction shows it condones anti-Jewish rhetoric while, at the local level, Muhammad and his board have turned the Philadelphia chapter into a hate group.

On July 24, 2020, the news website BillyPenn first reported on Muhammad’s anti-Semitic Facebook post from July 23:

[On] Muhammad’s public Facebook page, the meme referenced the backlash against Eagles wide receiver DeSean Jackson, actor/rapper Ice Cube and comedian/TV host Nick Cannon, who have all attracted attention recently for advancing theories that blame Jewish people for the plight of Black Americans. Cannon and Jackson have since apologized for their recent posts, while Ice Cube doubled down.”

Muhammad shared the meme as a defense of sorts on behalf of Jackson, Cannon, and Ice Cube:

The post included a caricature of a Jewish man wearing a yarmulke and pressing a large, bejeweled hand down on a faceless mass of people. Similar caricatures trace back to before the Holocaust, and were often used to depict Jews as a force of greed and oppression. Next to the image was a quote falsely attributed to French philosopher Voltaire: ‘To learn who rules over you, simply find out who you are not allowed to criticize.’”

After being questioned by a BillyPenn reporter, Muhammad removed the post while denying any memory of having shared it. Later, he issued defensive statements that were devoid of apology. The closest he came was an expression of “regret.”

In the meantime, a number of community and religious leaders have called for Muhammad to either resign or be removed from his position. For example, Gov. Tom Wolf, Attorney General Josh Shapiro, and State Sen. Anthony Williams joined the calls for Muhammad’s removal. While the Pennsylvania NAACP condemned Muhammad’s action, Kenneth Huston, President of the state conference, said that he was powerless to take any action which would have to come, instead, from national headquarters.

Unfortunately, the NAACP national office delayed its response by more than a week. Furthermore, its tepid statement supported Muhammad. Making matters worse, the NAACP headquarters has apparently failed to provide any direction to the Philadelphia chapter, according to WHYY:

Bishop J. Louis Felton, first vice president of the Philadelphia branch, said in an email that local leadership has not gotten any direction from the NAACP national office on the issue. ‘Congratulations on actually getting a response from the National office, as we certainly could not,’ said Felton.”

The Jewish Exponent reported on some of the community reaction:

‘We are truly saddened,’ the Pennsylvania Jewish Coalition said in a statement, ‘by such a prominent leader’s rejection of this alliance and inexcusable failure to recognize his own role in perpetuating racist stereotypes.’ The Philadelphia Muslim Jewish Circle of Friends, convened by the American Jewish Committee, asserted that Muhammad’s actions were ‘in direct violation of the very principles upon which the NAACP was founded.’”

So, what can we learn from the NAACP’s moral failing?

read more »

October 29, 2019

Raise More Money When You Avoid the 7 Deadly Sins of Fundraising

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:

read more »

August 28, 2019

Would You Have Accepted Money from Jeffrey Epstein?

A reporter for The Miami Herald interviewed me recently about whether charities should have rejected charitable contributions from Jeffrey Epstein, an admitted child sex trafficker who faced new accusations prior to his suicide earlier this month.

Now, I’ll ask you, would you have accepted a donation from Epstein?

Your knee-jerk response might be, “No!” Or, you might have a more emphatic and colorful response. It’s even possible that you would have accepted a charitable contribution from Epstein. You certainly wouldn’t be alone. Many nonprofit organizations have accepted substantial gifts from Epstein including Harvard University, the Ohio State University, the Palm Beach Police Scholarship Fund, Verse Video Inc. (a nonprofit that funds the PBS series Poetry in America), Ballet Florida, and other nonprofit organizations. Some nonprofits accepted Epstein’s money before his legal troubles, some after his initial plea deal on prostitution charges, and some around the time of the swirling accusations of child sex trafficking this year.

So, once again, would you have accepted a donation from Epstein?

As I told the reporter from the Herald, it’s not a simple question. It’s complex. It’s nuanced.

One factor is timing. Some might consider donations made before Epstein’s legal troubles to be completely problem-free. On the other hand, some charities might have more of an issue with an Epstein contribution made after his 2008 plea deal. However, after Epstein served his sentence, some charities would have been willing to accept an Epstein contribution once again.

Another timing issue involves whether a nonprofit had already spent Epstein’s donation prior to his legal difficulties. For example, Harvard says it spent Epstein’s donation by that time. In other words, there was nothing left to return.

Another factor to consider is the type of recipient charity. For example, a university might have been more willing to accept an Epstein donation than a child welfare charity would be.

Consideration of Epstein’s philanthropy gets even more complicated when we consider broader cultural issues. For example, in our society, we believe that ex-felons have paid their debt to society and, therefore, should be free to live life as full citizens including having the right to be philanthropic. Furthermore, we believe in a presumption of innocence. Epstein was not convicted of any new charges prior to his death.

More broadly, we must consider whether charities are supposed to investigate and pass judgment on donors before deciding whether to accept a gift. Many major donors, I dare say, have done something that they probably would prefer you didn’t know about, even if not rising to a criminal level. When does due diligence turn into snooping? Do you want your organization to have a reputation of hyper-scrutinizing prospective donors? Would major donors want to submit to that kind of treatment or would they simply take their money elsewhere?

When doing your due diligence, keep in mind that some of this nation’s greatest philanthropists were also troubling figures such as Andrew Carnegie, John Rockefeller, Henry Ford, and others. Charities are not in business to turn away contributions. They exist to take donations and use the funds to enhance communities and the world.

For example, I know of an order of nuns who accepts donations from known Mafia figures. They believe that they can take the funds and do more good with it than would be done if the money were left in the hands of the mobsters.

Having said that, the issues surrounding Epstein are certainly complex. I’ve only touched on some of the issues. The Miami Herald did a great job exploring some of the complications. You can read the article by clicking here.

To navigate a complex ethical dilemma, charities should consider all possible courses of action from multiple perspectives. In my article in the International Journal of Nonprofit and Voluntary Sector Marketing, I wrote:

read more »

January 11, 2019

Was the Trump Foundation the Only Funder on Santa’s Naughty List?

As you struggled to raise more money at the close of 2018 while carving out holiday time with loved ones, you might have missed an important news story.

On Dec. 18, news reports announced that the New York Attorney General’s Office and the Trump Foundation had reached an agreement to dissolve the Foundation. Under the terms of the deal, the NY Attorney General will distribute the Foundation’s remaining assets to charities.

Donald Trump

However, the closing of the Trump Foundation does not end the matter. Barbara Underwood, the NY Attorney General, says the state still seeks $2.8 million in restitution, plus additional penalties.

Furthermore, the Attorney General is asking the court to bar Donald Trump from serving with nonprofit organizations in New York for 10 years. The state’s lawsuit also calls for a one-year ban for three of Trump’s children — Don Jr., Ivanka, and Eric — all of whom were Trump Foundation board members.

The State of New York “lawsuit says that Trump’s charitable organization, which he founded in 1987, engaged in ‘persistently illegal conduct’ and that Trump basically used the Foundation as a slush fund to promote his business and political campaign,” according to a report in Vox.

This news item is inherently important. It involves a charitable foundation with significant assets that appears to have acted far less than charitably. It also involves the President of the United States. However, the significance of this story does not end there.

If the NY Attorney General is correct about the alleged misdeeds of the Trump Foundation, dissolution of the Foundation and a temporary prohibition of Trump family members from serving with NY charities for a limited time seem like an insignificant punishment. Unless serious penalties are levied against Donald Trump and his family members who were involved, the Trumps alleged criminal behavior will go unpunished. Furthermore, they will remain free to create and/or serve with nonprofit organizations outside of the State of New York. Other than a bit of bad press, the Trumps will pay little for their behavior.

The problem does not end there. Failure to hold the Trumps personally liable not only fails to punish the Trump family, it sends a signal to anyone interested in using a charitable foundation for personal benefit. That signal is that there is little downside for misbehavior. In other words, there will be little to no deterrent effect unless severe penalties are imposed by the court, assuming the allegations are proven true.

The other thing we need to understand about the Trump Foundation story is that it is not an isolated situation. A decade into my fundraising career, the nonprofit sector was rocked by the scandal surrounding the Foundation for New Era Philanthropy. Operating from 1989 to 1995, the Foundation raised over $500 million in an elaborate Ponzi Scheme that defrauded well known charities and experienced philanthropists out of millions.

That wasn’t the first funder scandal, and it certainly wasn’t the last. Let’s face it. The Trump Foundation is not the only funder on Santa’s naughty list.

As another report in Vox observed, “There are some 86,000 foundations in the United States, with total assets of around $890 billion. And the vast majority of them never face this kind of scrutiny.”

read more »

September 14, 2018

Lions, Tigers and Bears, Oh My: Fundraising in Times of Crisis

As I’m writing this, Hurricane Florence is barreling toward North Carolina. Watching the news reports, I’m reminded that the best way to weather a storm is to prepare before one strikes. The tragic situation in the southeastern US can serve as a metaphor for coping with any type of crisis, even for the nonprofit sector.

The best way to deal with a crisis is to prepare for one before one strikes. 

Guest blogger Sophie W. Penney, PhD is a big believer in that axiom. Sophie is President of i5 Fundraising and Senior Program Coordinator/Lecturer for the Penn State University Certificate Program in Fundraising Leadership. As the co-editor and chapter author of the soon-to-be-released book, Student Affairs Fundraising, Raising Funds to Raise the Bar, Sophie will be sharing her insights at the CT Alliance 2018 Conference on October 2, 2018 where she will present a session about leading through challenging times, Lions, Tigers and Bears: Leading Through Crisis.

A crisis can affect any type of organization. The nonprofit sector is not immune. As I point out in “What is the Most Important Thing You Can Learn from Recent Nonprofit Scandals?” there are three broad types of scandals or crises: 1) self-inflicted scandals beyond your control, 2) self-inflicted scandals you could have avoided, and 3) guilt-by-similarity scandal.

I’m grateful to Sophie for her willingness to share with us a few tidbits from her upcoming presentation that will help us all become better prepared to weather any scandal or crisis as we continue to strive to raise more money:

 

Michael Rosen’s recent blog post, “The Dark Side of the Fundraising Profession,” was a clarion call to fundraisers. The piece served as a reminder that a profession designed to bring joy and result in great good can be fraught with challenges.

Fundraisers are pressed to raise ever-larger sums (and the sooner the better); as a result, it can be compelling to focus on fundraising tips, tools, and techniques that will bring in ever-bigger dollars. Yet a crisis, particularly legal or ethical in nature, can derail fundraising not only for a fiscal year, but for far longer.

Fundraising in times of crisis hit home for me in 2011 with the advent of the Jerry Sandusky Scandal. This child sexual abuse scandal toppled the Penn State University President, resulted in the abrupt firing of the University’s revered football coach, led to the sale of a nonprofit founded to serve the very types of children who became victims, and rocked a small community previously known as “Happy Valley.” What’s more, the scandal came to light in the midst of the University’s billion-dollar capital campaign, which was on the verge of going into a public phase. Yet, the Sandusky Scandal is just one of many such crises to rock the nonprofit world:

read more »

May 18, 2018

Thank You For Your Support!

With this post, I want to thank you and share some practical information about plagiarism.

Last week, I revealed how I was the victim of plagiarism. Someone lifted a portion of one of my recent blog posts, altered the intention of my words, and purposely misattributed them to someone else in an article he wrote attacking the Association of Fundraising Professionals.

Now, I would like to thank you and everyone who supported me with blog comments, tweets, emails, and phone calls. Professionally speaking, the support confirms that my confidence in our profession is well placed. Personally speaking, the support warmed my heart and let me know that I am not alone.

At times, such as in last week’s example, plagiarism is an intentional act. At other times, plagiarism is accidental.

When I spoke with a friend, a college faculty member and former fundraising professional, he confirmed that what I had experienced was clearly an act of plagiarism. He also told me about a website that provides the academic community with useful information for good people who want to better understand what plagiarism is and how to avoid it. The website Plagiarism.org says:

Plagiarism is a common (and often misunderstood) problem that is often the result of a lack of knowledge and skills.”

By creating a better understanding, the website seeks to reduce incidents of plagiarism in schools and throughout society. “What is Plagiarism?” an article at the website, tells us:

read more »

May 4, 2018

The Dark Side of the Fundraising Profession

People join the fundraising profession because they are good folks who want to do good. They want to make the world a better place. That’s why I entered the profession. It’s probably why you did, also. Unfortunately, not all fundraisers are good people. Unfortunately, even good people occasionally do bad things.

Our professional organizations have created ethical codes and standards of professional practice to guide our behavior and to help earn public trust. We even have mechanisms to hold fundraising professionals accountable to those standards.

Now, a local organization has attracted national attention, but not in a good way. It’s a story that tests the integrity of the Association of Fundraising Professionals, CFRE International, and the entire fundraising profession. It’s a story that will ultimately reveal whether or not we are willing to hold fundraisers accountable. It’s a test of whether our ethics codes and professional standards are merely nice words on paper or whether they truly help define fundraising as a profession.

The story I am referring to involves the Silicon Valley Community Foundation. I won’t repeat the entire story here. The Chronicle of Philanthropy has already done some excellent reporting on the matter, and I’ll provide links at the end. For now, I’ll just take a moment to summarize the reports.

Former employees of the Foundation “accuse Mari Ellen Loijens, the Foundation’s top fundraiser, of engaging in emotionally abusive and sexually inappropriate behavior.” The Chronicle further states:

The Chronicle article, based on several months of interviews with 19 former employees, raised questions about the leadership of Loijens, who oversaw fundraising at the community foundation. While many say she deserves credit for helping raise significant sums at Silicon Valley — which at $13.5 billion in assets is larger than Ford or Rockefeller — former employees said she demeaned and bullied her staff, made lewd comments in the workplace, and on at least one occasion sought to kiss a woman working for her.”

Two days before The Chronicle published its findings, Emmett Carson, Chief Executive Officer of the Foundation, announced that an internal investigation of the allegations is being “conducted by Sarah Hall, a Washington, DC, based senior counsel at Thompson Hine and a former federal prosecutor.” According to The Chronicle, “The Foundation said in a statement that the ‘investigation into alleged incidents of misconduct will continue, and at the conclusion of that investigation SVCF will take whatever action is necessary to preserve the integrity of our organization.’”

On April 19, 2018, a day after The Chronicle published its report, the Foundation confirmed that Loijens had resigned.

On April 26, 2018, The Chronicle reported that the Foundation’s Board placed Carson on indefinite, paid administrative leave. Greg Avis, a founding Board member and former Board Chair, has been appointed interim CEO. The investigation continues and has been expanded.

On May 2, 2018, Silicon Valley Business Journal reported that Daiva Natochy, the Foundation’s Vice President for Talent, Recruitment and Culture, has resigned.

The Silicon Valley Community Foundation has many issues. The allegations of bullying and sexual harassment leveled against Loijens are just part of the problem. However, Loijens alleged behavior is not just a problem for the Foundation; it is a challenge for the fundraising profession as well.

Loijens behavior, if true, could be construed as a violation of the AFP Code of Ethical Standards. Specifically, Loijens alleged behavior appears to be in conflict with the following provisions, at a minimum:

read more »

April 20, 2018

Do Not Make this Big Error with Your Next Challenge Grant

I’ve seen it frequently. Fundraising professionals often make a big error when using a challenge grant. And they compound that error unethically by misleading prospective donors. It’s a common issue that is costing the nonprofit sector a fortune.

What’s the huge mistake? Fabrication of a bogus challenge grant.

True challenge grants are great. When a fundraising professional inspires a donor to provide a challenge grant, the nonprofit has a powerful tool to encourage greater contributions when making an appeal.

Typically, a challenge grant will match new and increased support to a charity. Oftentimes, the match will be dollar-for-dollar, though other multiples can also be arranged. In the case of a dollar-for-dollar challenge, if a new donor gives $100, the challenge-grant donor will give the charity $100. If a $50 donor from last year gives $75 this year, the challenge-grant donor will give $25. Typical challenge grants are not unlimited; the donor will set a maximum total amount.

Using a challenge grant can be an excellent fundraising tool for four reasons:

1.  It encourages donor support by increasing the value of donations. For example, with a one-to-one match, new donors have their contributions effectively doubled, thereby significantly magnifying the impact donors can have.

2. It encourages donor support because donors do not want the organization to lose money. If a donor makes a new or increased gift, the charity will receive additional money from the challenge-grant donor. However, the converse is also potentially true.

If a donor does not give, the charity could lose out on some of the challenge grant. Therefore, while a challenge grant can increase the value of a donor’s gift, it can also create the impression of a cost to the organization if the donor does not give. Some donors are motivated by the concern, “If I don’t give my $125, the organization could miss out on another $125 from the challenge-grant donor. I don’t want to cost the organization $125.”

3.  It creates a sense of urgency to give now. Typically, challenge grants must be fulfilled within a narrow time-frame. So, prospective donors are encouraged to act now rather than delay their philanthropic decision. The sooner someone gives in response to an appeal, the more likely they are to give. People who set an appeal aside thinking they’ll get to it later, often do not.

The urgency created by a challenge grant is also useful for planned giving campaigns encouraging donors to include the charity in their Will (Charitable Bequest). People do not like to think about end-of-life planning, so it’s easy for them to keep delaying until it’s too late. A challenge grant creates a sense of urgency that can overcome what social scientists call personal mortality salience.

You can read about a fantastic challenge-grant campaign for planned giving in my book, Donor-Centered Planned Gift Marketing, beginning on page 188.

read more »

%d bloggers like this: