Posts tagged ‘ethics’

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.

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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?

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June 5, 2020

Avoid the 7 Deadly Sins of Fundraising [WEBINAR]

I don’t have to tell you that these are troubling times. We’ve had to cope with coronavirus (COVID-19), the economic fallout from the pandemic and, now, the heart-wrenching killing of George “Perry” Floyd at the hands of Minneapolis police officers.

As nonprofit managers and fundraising professionals, we have a choice: We can allow ourselves to be overwhelmed by the horrible events of 2020, or we can continue to do what we always do and help those who depend on us. While the suffering around us pains me, I take some solace in knowing that. like you, I am a member of a noble profession that seeks to make the world a better place. We are needed now more than ever.

That’s why I want to invite you to join me and your nonprofit colleagues for a webinar to help you be more of the fundraising professional you aspire to be. The program is hosted by the Association Fundraising Professionals – Greater Philadelphia Chapter. Here are the details so you can register now:

Avoid the Seven Deadly Fundraising Sins and Raise More Money

Date: Tuesday, June 9, 2020

Time: 1:00 – 2:30 PM (EDT)

Description: Surveys show that the public’s trust in the nonprofit sector has been on a steady decline for years. At the same time, the number of charity donors has been on the decline and, in 2018, total giving fell by 1.7% in inflation-adjusted dollars.

This webinar will use real-world examples cited by the Association of Fundraising Professionals and pulled from news headlines to illustrate seven deadly fundraising sins involving: conflicts of interest, gift restrictions, accountability, tainted money, donor privacy, compensation, and cooking the books. By reviewing these examples, you’ll be better able to avoid making the same mistakes.

Because there are more than seven sins to avoid, you’ll also get a decision-making model to help you sidestep blunders, build trust, and raise more money.

Tickets: $15 (members), $40 (non-members)

Registration: Webinar seating is limited, so register now by clicking here.

As I have written previously:

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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:

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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:

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June 11, 2019

4 Major Problems with Nonprofit Compensation

Salaries are a big problem for nonprofit organizations. However, the problem, or rather problems, might not be what you think they are.

Let’s look at just four major issues:

1. Nonprofit staff earns too much money. The mainstream media regularly trumpet the high salaries that some nonprofit executives receive. Through their selective reporting, many in the media advance a narrative that suggests nonprofit professionals earn too much money. As a result, donors focus frequently on charity overhead, including salaries, rather than program and service outcomes when evaluating charitable organizations.

2. Nonprofit staff earns too little money. Simply put, many people working for nonprofit organizations are grotesquely underpaid. For example, I recently came across an advertisement for a nonprofit Administrative Manager and Marketing Associate in Washington, DC. The charity requires candidates to have a college degree and an automobile. The organization offers an annual salary of just $35,000. Take a moment and think about that. The job pays $35,000 a year in Washington, DC! In case you don’t know, Washington, DC is the fifth most expensive city in the US, according to Kiplinger.

Yes, some charity executives are overpaid. However, many high-paid nonprofit employees are worth every dollar because of their skills and proven results. Geographical cost of living is another reason some nonprofit professionals earn higher salaries. On the other hand, the story that the media seldom cover is that of underpaid nonprofit staff. The failure to provide a competitive salary, or even a salary someone can live on reasonably, makes it difficult for charities to attract and retain talented staff.

Maclean’s examined nearly 600 charities in Canada with gross revenue of over $2 million (Canadian $). The publication found charities that significantly overpaid or underpaid chief executives, relative to peer organizations, were less likely to be transparent or efficient. “Analysis of charity data suggests extremely high compensation is linked to poor results for charities. But intriguingly, so is extremely low compensation,” according to the report. “High salaries receive the most attention, but Maclean’s found a stronger correlation with poor performance at charities that underpay their staff or have no staff at all.”

Ideally, nonprofit organization would provide employees with competitive compensation packages taking into account the type and size of organization, the job position, and geographic area. Compensation does not have to be precisely average; it can be high or low though it should be within the average range. Compensation that is excessively high or low can be directly problematic and could be a symptom of other problems at the organization.

This brings me to a third compensation problem:

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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.”

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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:

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August 24, 2018

What is the Most Important Thing You Can Learn from Recent Nonprofit Scandals?

Recent incidents at Michigan State University, The Ohio State University, Oxfam Great Britain, The Presidents Club Charitable Trust, Silicon Valley Community Foundation, and elsewhere remind us that the nonprofit sector is not immune to wrongdoing and scandal.

If you’ve never worked for a charity reeling from scandal, there’s a good chance you will one day. Even if you don’t work directly for a scandalized charity, you could still be affected by a loss of public trust if a similar nonprofit finds itself under the spotlight for misdeeds.

For those reasons, it is essential that you learn the most important thing about how to survive a scandal.

Three broad types of scandals can affect a nonprofit organization negatively:

1. Self-inflicted scandals beyond your control. Here’s an example of a situation that was beyond the control of fundraising staff. Oxfam Great Britain was banned from operating in Haiti and the organization’s country director was forced to resign following allegations of inappropriate sexual behavior. Four other employees were fired for “gross misconduct.” While the frontline fundraising staff was not at all involved in the scandal itself, they nevertheless had to deal with the aftermath.

2. Self-inflicted scandals you could have avoided. We saw this when the Ohio Attorney General’s Office accused the charity Cops for Kids of defrauding donors of $4.2 million. Of all the money it raised over a 10-year-period, the charity spent less than two percent on charitable programming. This scandal allegedly involved fundraising staff as well as senior staff engaging in fraudulent behavior. The solution to this type of scandal is simple: Do not misbehave. Obey the law and adhere to the Association of Fundraising Professionals Code of Ethical Standards, the International Statement of Ethical Principles in Fundraising, and/or your nation’s own fundraising code of ethics.

3. Guilt-by-similarity scandal. People in Scotland experienced this several years ago. A cancer charity was embroiled in a well-publicized scandal. As expected, that charity saw a sharp decline in contributions. However, there was also an unpleasant, broad side effect. Completely unaffiliated cancer charities in Scotland also experienced a deep drop in donations resulting from broad public mistrust of all cancer charities. It took the innocent charities nearly a year to recover even with a coordinated campaign to restore public confidence.

Other than avoiding problems in the first place, always a good idea, what can you and your organization do to ensure it can survive a crisis or scandal?

The answer is simple, though the execution is not: Build strong relationships with donors. It takes effort, financial resources, and time. However, it’s an investment well worth making.

Recently, a reporter for The Columbus Dispatch contacted me. Rob Oller sought my commentary about the scandal involving Urban Meyer, The Ohio State University football coach. You can read about the situation on your own since there’s no need for me to get into the details here. Suffice to say that the coach has received a three-game suspension, but not before Bob Evans Restaurants withdrew its corporate sponsorship of Ohio State football.

Oller asked me about how scandal affects charitable giving. I told him, “It depends on the institution and quality of the relationships with its donors over time. The stronger the relationships the more likely the institution is able to weather the controversy.”

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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:

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