Fundraising’s Dark Side and What to Do About It

Today at CNN.com and tonight on CNN’s AC360°, fundraising is taking some heat. The national media outlet is reporting on recent investigations from the Tampa Bay Times and Center for Investigative Reporting, which reveal outrageous ethical breaches in our industry. Closer to home, The Agitator’s Roger Craver issues a tough call to action for fundraisers—and Avalon is glad to see it. He writes:

We must ask questions and offer advice.

• What additional roles should and can professional organizations like the DMA and AFP play?
• Should we mount a campaign to arm the regulators with more teeth? To demand swifter, more meaningful enforcement?
• Why do the truly clean and transparent charities, agencies and consultants stand by in silence as others steal their names and reputations

Why? Why? Why?

Let’s begin with some truth telling. Many honest and ethical organizations worry that reports like these are ultimately more trouble than they are worth—that media scrutiny of fundraising will backfire, and that aggressive regulation will cause pain. Admit it! You are at least a little afraid that opening this can of worms will not be in your organization’s best interest.

We worry about that too—and it’s understandable. Given the complexities of cost-of-fundraising calculations and the strategic expense of acquiring new donors, there is a very real concern that reporters and regulators will fixate on the wrong numbers and make us all look bad.

But reputations are already at stake. As Craver points out, not only do the organizations topping CIR’s worst list engage in misleading fundraising, they do so by piggybacking the brands of ethical nonprofits. For example, CIR’s worst of the worst, Kids Wish Network, undermines the legitimate brand of the Make-a-Wish Foundation. As Ken Sterns explains in the Chronicle of Philanthropy, “It takes more expertise than the average donor…can muster to distinguish between the legitimate and the illegitimate, the effective and the ineffective.” Name confusion causes lasting harm to honest organizations.

We have to take the long view on this. Fortunately, nonprofits and the for-profit professionals who support them are very good at this. We know that difficult issues require strategic commitment—in fact, many of us got into this business for that very reason. We are well positioned to move the ball forward on these issues.

How? Let’s start with the basics. Every one of us should be well versed in the essentials of ethical fundraising. I don’t care if you are brand new to the industry or an old hand – you need to understand the industry rules governing our business. These include reasonable agency compensation, transparent and honest communications, donor acknowledgement, the protection of personal information and—most importantly—stewardship of the programmatic goals and organizational health that donors invest in with their gifts.

You should also grasp the core logic behind these rules: unethical fundraising degrades the philanthropic spirit that is so essential for the common good. Familiarize yourself with the AFP’s Donor Bill of Rights, which begins with this statement:

Philanthropy is based on voluntary action for the common good. It is a tradition of giving and sharing that is primary to the quality of life. To ensure that philanthropy merits the respect and trust of the general public, and that donors and prospective donors can have full confidence in the nonprofit organizations and causes they are asked to support, we declare that all donors have these rights…

Second, promote the internalization of this ethos at your organization. Integrate ethics training into the rest of your learning curriculum, encourage critical thinking and reward strategic commitment to the long-term impact of your mission. Don’t marginalize ethics by speaking of it only rarely (“It’s time for our annual ethics training.” Snooze!) Instead, point out the relevance of ethical fundraising for day-to-day operations, and make it a priority to communicate that conceptual link. Remember, fundraising isn’t a necessary evil—it’s an opportunity for a cadre of dedicated professionals and many thousands of caring donors to participate in your mission. Embrace this, and make sure that your entire team—staff, board, consultants and other partners—understands the connection.

And don’t stop there! Lead outwardly. Lean on the AFP and DMA to use their muscle on behalf of honest nonprofits and fundraisers like you. Advocate for regulations that both reflect the strategic realities of nonprofit finance and refuse to tolerate fraud. Participate on boards, convene advisory panels and attend conference events that address these issues. Speak out against unfair or incomplete media coverage. Continue those difficult conversations about executive pay, the cost of fundraising, and overhead expense. Right now, there is an important debate happening about whether overhead management or program impact is a better measure of nonprofit effectiveness…are you part of that discussion? (Note: Industry leadership will also boost your career!)

Avalon looks forward to continuing this important conversation—with our staff, our clients, our partners, our industry colleagues and you.

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JENNIFER PHILLIPS is Avalon’s Chief Strategy Officer and holds a Ph.D. in Theology, Ethics and Culture from the University of Virginia.