April 1, 2008

Most Charity Leaders See Ethics Violations in Fund Raising, Survey Finds

More than half of nonprofit executives say they have observed unethical fund-raising behavior, a new study has found. The most common concern raised by the executives: use of percentage-based compensation to pay fund raisers.

The research, released on Monday at the annual meeting of the Association of Fundraising Professionals, was conducted by the Giving Institute, an organization in Glenview, Ill., that represents fund-raising consulting firms. The institute surveyed nearly 450 nonprofit executives in charitable organizations of all types; a majority of those surveyed said they had at least 20 years of experience at nonprofit groups.

While the association has long banned commissions as part of its ethics code, the practice appears to be alive and well, according to the nonprofit executives surveyed. Fund raisers who oppose commissions say they worry that donors will think they are being asked to give more to benefit the fund raiser rather than the charitable cause. —Holly Hall

Comments

1. In the last eight years I have worked full-time for two major nonprofit organizations and, previously, as a consultant for dozens of smaller, grassroots organizations. Yet I have never once encountered any fundraiser who received percent-based compensation. Who are these people? What organizations are they working for? Has anyone else ever actually experienced such a practice?

   — Mark    Apr 1, 02:11 PM    #

2. Half of those executives surveyed had not encountered it, but half of them had.

   — Ed    Apr 1, 03:44 PM    #

3. I worked for a non-profit that promised staff fundraisers a percentage, but then renegged when the organization was unable to meet fundraising and earned income goals. Later, a new director came in after staff contracts had been set, and stopped this practice without any other compensation for staff members were expecting certain pay.

   — BK    Apr 1, 03:55 PM    #

4. I attended a conference for fundraisers in December and a manager openly discussed how he was examining such a practice. The individual worked at a large hospital.

   — Steve    Apr 1, 04:03 PM    #

5. Can anyone say Florida State?

   — RP    Apr 1, 04:06 PM    #

6. Forgive me for asking the unthinkable: why is commission-based fundraising unethical when other forms of compensation are not? Financially speaking, we all live in a risk-reward world. Offering incentivized compensation removes some of the risk from the organization (which is GOOD for the organization) and puts it on the shoulders of the fundraiser.

   The underlying problem is this: the ethical models used expect an extreme altruism on the part of the fundraiser—as if in some kind of perfect world professional fundraisers don’t care about personal success or having a career. So, allow me to ask this: is it ethical to raise money knowing that if I am unsuccessful I will be fired? Are we saying that no fundraiser should be fired for failing to raise money? Is the fundraiser not acting in self-interest in this case? This is all simply ridiculous. Ultimately the only way to be “ethical” by this definition is for the fundraiser to take a vow of poverty and live in a communal living context provided by the community. Of course, this is not practical at all. (By the way, the same logic would ban all forms of transactional philanthropy because of benefits received by the donor. It would, after all, be unethical to receive such gifts.)

   What is needed is an approach in which everyone involved “wins”, the donor, the fundraiser, the organization, and the ultimate recipient of the gift. Some version of this approach is not impossible; in fact it happens all the time. Everyone should be rewarded for the work they have done and held accountable for the work they have not done.

   — John    Apr 1, 04:17 PM    #

7. Given the behavior of the telemarketers who bombard the nations’ phones pitching for contributions in the name of this or that charity (and so avoiding do not call prohibitions, not to mention the meager percentage of the take passed on to the charity in exchange for getting the use of their name), I do not find it surprising that this kind of sleazy practice is prevalent. These kinds of practices leave a very short distance between the street corner beggar and the fund-raiser. Charitable and non-profits who farm their fund-raising out to these kinds of operations need only look in the mirror to see who is on the slippery slope.

   — CW    Apr 1, 04:26 PM    #

8. John, thou dost protest too much.

   — Fred    Apr 1, 04:33 PM    #

Previous: Judge Dismisses Constitutional Challenge to U. of California's Course-Evaluation Policies
Next: Robert F. Goheen, Who Oversaw Coeducation as Princeton's President, Dies