Shocking Fundraising Behavior from Nonprofits Captures Media Attention

Nonprofit hospitals across the country have made disturbing news headlines recently. Sadly, while medical staff continue to provide heroic patient care, many of the recent news stories deal with unethical fundraising behavior that puts all nonprofits at risk. Consider these two items:

• Hospitals across the country have given major donors special, early access to the COVID-19 vaccine.
• In a story unrelated to the coronavirus, one hospital fundraising office has offered medical staff bonuses for referring “Grateful Patient” prospects.

While those news items involve healthcare organizations, all charities should be concerned. Let me explain. When some nonprofits behave badly, it reflects on the entire nonprofit sector with the potential to erode public trust and, therefore, support. There is ample research, as well as anecdotal evidence, that reveals that the fundraising efforts of virtuous charities can be harmed by the unethical behavior of unrelated nonprofit organizations.

Let’s look more closely at what has occurred recently:

MAJOR DONORS GIVEN EARLY ACCESS TO VACCINE

Initial excitement over the release of COVID-19 vaccines has given way to frustration as only 18 percent of the US population has received the first dose with confusing sign-up procedures and long lines greeting many people.

“But one group has gotten a head start in receiving the coveted shots: people who’ve donated money to hospitals distributing the vaccine,” according to a report in MarketWatch.

Ethical_Decision_Making_Article.28164930 AFP statement major donor vaccinations Feb 2021 final AFP Statement Grateful Patient Fundraising March 2021 final

According to reports, hospitals across the nation have been giving favorable treatment to major donors including Storment Vail Health (Kansas), Overlake Medical Center (Washington), Hunterdon Medical Center (New Jersey), MaineGeneral Health (Maine), and Garnet Health (New York).

Authorities in New York have launched a probe into Garnet’s actions to determine if any laws were broken. While evaluating whether or not laws were broken, it is important for us to also consider whether the actions of Garnet and other hospitals are ethical or unethical.

“As we see numerous reports of line jumping and favoritism, any situation that could lead to distrust in the fairness of the vaccine allocation process needs to be proactively managed. Redeploying staff to help with vaccination is reasonable, but care should have been taken to avoid [MaineGeneral Health] fundraising staff connecting with prior donors on this,” Holly Fernandez Lynch, an ethics professor at the University of Pennsylvania’s Perelman School of Medicine, told the Bangor Daily News.

The Bangor Daily News added, “Medical ethicists said there were many good reasons for MaineGeneral and other hospitals to test processes before opening wider clinics, but even well-intended efforts involving philanthropy staff and donors can be seen negatively.”

Medical ethicists weren’t the only ones to weigh-in on the situation. The Association of Fundraising Professionals, the largest community of charities and fundraisers in the world, has released the following statement from President and CEO Mike Geiger, MBA, CPA:

The idea of hospital systems, or any charity, ignoring protocols, guidance or restrictions—regardless of origin—and offering certain donors and board members the opportunity to ‘skip the line’ and receive vaccinations ahead of their scheduled time is antithetical to the values of philanthropy and ethical fundraising….[emphasis added]

Offering vaccinations to major donors, and not to populations with the greatest need … destroys public trust—to say nothing of the possible impact on constituents of the charity who don’t receive the appropriate vaccinations or medical attention in time.…

AFP, and the 26,000 members in our community around the world who represent nearly every charitable cause imaginable, condemn this activity in the strongest manner possible. It is unethical and inequitable, and we call on all health systems and all providers of vaccinations to deliver this service in a manner that is fair and equitable for the people they serve and consistent with procedures developed by the Centers for Disease Control and all applicable levels of government.”

Some hospitals around the country have behaved unethically, violated the law, or both. However, even those who may have a legitimate explanation for their actions and who have done nothing wrong may still be giving the appearance of having done something unethical involving their interactions with major donors. That’s still a big problem. As the AFP Code of Ethical Standards states clearly:

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:

What do Abraham Lincoln and Jennifer Lawrence have in Common?

President Abraham Lincoln and actress Jennifer Lawrence each learned something that can help your fundraising efforts. Before I tell you what that is, let me share a bit of history with you.

Earlier this week, the USA celebrated Presidents Day. Congress originally established the Federal holiday to commemorate the birth of George Washington, the nation’s first President, born on Feb. 22, 1732. At some point, the holiday also began to include Lincoln, born on Feb. 12, 1809. Then, all of the US Presidents were lumped into the holiday. Well, sort of. Despite its commonly excepted name — Presidents Day — it remains officially Washington’s Birthday.

To honor a President this week, I thought I’d share some wisdom from one of them. Then, as I was preparing to write this piece, I stumbled upon an article about Lawrence, and realized she has learned the same lesson as Lincoln.

Paraphrasing 15^th century poet John Lydgate, Lincoln is believed to have stated:

You can please some of the people some of the time, all of the people some of the time, some of the people all of the time, but you can never please all of the people all of the time.”

Lawrence, definitely in a different league than Lincoln, has nevertheless learned the same lesson. While she likely had this insight well before this year’s British Academy of Film and Television Awards, she had a reminder of it resulting from an interview hosted by Joanna Lumley.

Lumley introduced Lawrence by saying, “And we start with the award for Outstanding British Film and who better to kick the whole evening off than the hottest actress on the planet? Soon to be seen in ‘Red Sparrow,’ it’s the ravishing Jennifer Lawrence.” The American actress then came out and modestly said, “Hi. That was a bit much, but thank you, Joanna.”

Following the exchange, the social media battle began. Some people thought that Lawrence was being “discourteous,” “a spoiled brat,” “rude,” and more. On the other side, there were plenty of people who sided with the actress with one even questioning, “How is that rude?”

Lincoln Memorial

Yes, you can never please all of the people all of the time.

That’s an important lesson for all of us.

Your fundraising plan will not make everyone happy. Your direct mail copy will not make everyone happy. The graphic design for your annual report will not make everyone happy.

At some point in your career, likely far more than once, you’ll hear, “We can’t do that here. We’ve never done it that way.” You might even have someone in upper management comment negatively on your direct-mail appeal because it’s not how she would write a letter to a friend — “Do you really need to use bullets and boldface?”

You get the idea.

You just need to understand that you will never make everyone happy all of the time. When confronted by senseless criticism based on emotion rather than knowledge, keep these five points in mind:

Are You Doing Something Wrong Without Even Knowing It?

Most fundraising professionals are good people trying to do good things. Most fundraising professionals believe they are ethical and, therefore, will routinely choose right over wrong.

However, what do you do when confronted with a situation where there is no clear right or wrong option? What do you do when you encounter a dilemma beyond your experience? What do you say when a donor or board member questions your actions?

That’s where fundraising ethics comes in. Ethical standards help us be the kind of people we want to be. Ethical standards guide us as we navigate fundraising challenges so that we can achieve the best results for our donors, beneficiaries, and organizations.

(Toward the end of this post, I’ll tell you how you can get two FREE white papers that explore the ethics issue in greater detail.)

Unfortunately, many find that the existing fundraising ethics codes in use around the world are inadequate. That’s why Rogare, the fundraising think tank at the Plymouth University Hartsook Centre for Sustainable Philanthropy,  has undertaken a major, new ethics project.

Rogare seeks to develop a new normative ethics theory that balances the interests of donors and charity beneficiaries. This will empower us to more consistently make good decisions and take the right actions. That’s good for donors, charity beneficiaries, and nonprofit organizations.

Ian MacQuillin, Director of Rogare, explained it this way on The Agitator blog:

Ethical theories are intended to help us think through how to make better decisions in doing the right thing, and this is what our work at Rogare, with the help of people such as Heather McGinness, is trying to do, particularly to ensure that we do the right thing by our beneficiaries as well as our donors. We need ethical theories to help us make better decisions every day in our lives, precisely because knowing ‘right’ from ‘wrong’ is often such a morally grey area. Fundraising is really no different.”

For example, we can probably agree that we should not tell lies. However, imagine the following scenario: You’re scheduled to meet a wealthy donor for a noon lunch. You arrive at the restaurant early to make sure everything is perfect. At 12:05 PM, the donor has yet to arrive. At 12:10 PM, the donor has not shown up, and you have not received any messages. At 12:15 PM, you begin to wonder if you have the wrong day and begin to get annoyed. Finally, arriving 20 minutes late, the donor comes through the door. After greeting you, the donor says, “I’m sorry I was running late. I hope it’s okay.”

In response to the donor in the scenario I’ve described, you could say, “Well, as a matter of fact, I was becoming annoyed. You know, you could have sent me a text message to let me know you were running late.” Or, to put the donor at ease, you might choose to lie and say with a warm smile, “Oh, don’t worry about it. It’s no big deal. I’m fine.” Hmmm, maybe lies are not always bad.

My example is admittedly a bit silly, even simplistic. My point is that things we think are black-and-white don’t always remain such. That’s why ethical frameworks and decision-making models are so important.

Okay, now it’s time for the FREE stuff.

Rejecting a $100,000 Gift Helps #Nonprofit Raise MORE Money

The idea of rejecting a major donation usually sends a chill up the spine of nonprofit executives. After all, nonprofit organizations are not in business to return donations. Instead, charities employ hardworking fundraising professionals to bring in contributions. For many nonprofits, donations are the lifeblood of the organization.

However, rejecting a gift can actually help a charity protect its mission. Recently, I reported on two organizations that rejected or returned major gifts:

“When Should You Refuse a Gift?” — tells the story of Lucy the Elephant rejecting a grant offer from People for the Ethical Treatment of Animals

“Update: Spelman College Returns Gift from Bill Cosby” — relates why a major gift from Cosby was returned

Not long ago, the Girl Scouts of Western Washington demonstrated that a nonprofit can protect its mission and raise more money by mindfully rejecting a donation. In the case of the Girl Scouts, the organization rejected a $100,000 gift and raised over $250,000 in the process!

When the Girl Scouts received the $100,000 gift, the staff was understandably thrilled. The money equaled approximately one-third of the organization’s financial assistance program budget for the year. The Girl Scouts offer financial assistance so that any girl can join despite economic obstacles.

Unfortunately, the Girl Scouts quickly learned that the major gift came with a major stipulation: the organization could not use any of the funds to help transgender children.

Megan Ferland, CEO of the Girl Scouts of Western Washington told Seattle Metropolitan magazine:

Girl Scouts is for every girl. And every girl should have the opportunity to be a Girl Scout if she wants to.”

In other words, accepting the donor’s terms for the gift would have violated the organization’s mission. So, the Girl Scouts made the only decision they could; they returned the gift.

Then, the organization tried to turn a lemon into lemonade. The Girls Scouts launched an Indiegogo crowd-funding campaign to try to recoup the funds. In the campaign, the Girl Scouts explained the situation. However, the organization correctly protected the privacy of the donor by not revealing the donor’s name.