The following is
the text of a presentation made to a
meeting of the San
Diego Chapter of the
Association of Fundraising Professionals (AFP)
by Janie
Anderson, CFRE,
Vice President/Programs
Explaining why
fundraisers should not be paid on commission or contingency,
this was the inaugural presentation in a series of "bite-size" lessons,
based on the AFP Code of Ethics and Standards of Professional Practice
The premiere of the fall television season is upon us –
and I am pleased to introduce the first mini-series of the season. We are not
sure it will be high in the Nielsen ratings, but we hope it will do well with
you.
What I am introducing in this lighthearted manner is our
new series of "bite-size" information pieces on Ethics. If you were with us in
July, you heard our speaker Tim Delaney challenge all of us to do more to make
ethics a priority in our nonprofits – and we decided to start close to home.
For a few minutes at each meeting from now on, a member
of the board will address some portion of the AFP Code of Ethical Principles
and Standards of Professional Practice.
As the first speaker, I am choosing to
start with the number 1 hot topic on the AFP Website’s Ethics Q
& A, Standard Number 16, which says:
Members shall not accept compensation that is based on a percentage of
charitable contributions; nor shall they accept finder’s fees.
It would seem to be a logical incentive to pay
fundraisers, whether they are staff or consultants, based on the amount of
money they bring in – and probably some board member has suggested it to you
or your director at some point. It works for salespeople – why not us?
I will give you six reasons from AFP’s position paper on
the topic:
1) If charities pay fundraisers on
commission, the mission and long-term interests of the charity may become
secondary to the worker’s personal interest and self-gain – and there are
laws governing private inurement of public funds. They safeguard against
the use of donated funds for private benefit. If you don’t know the laws,
you should.
2) Donor attitudes can be unalterably
damaged in reaction to undue pressure and the awareness that a commission
will be paid to a fundraiser from his or her gift.
3) Percentage-based compensation can
foster inappropriate conduct by individuals whose self-interest is based
on immediate results, regardless of the donor’s best interests.
4) The role of the fundraiser is to
build a team including committed, enthusiastic and capable volunteers.
Tying staff compensation to a percentage of charitable contributions
raised may discourage this activity – as well as discouraging cooperation
among fundraisers in a large organization.
5) Commissions can result in reward
without merit as in these cases:
A. Charities receive unexpected or
unsolicited gifts, often bequests, sometimes from unknown benefactors.
These windfall gifts can result in an unrealistically high base – an
unearned base -- for calculating the commission.
B. Pledges and various planned gifts
can result in an unpaid gift or one that is delayed by years, but the
fundraiser who secured the gifts expects payment today.
6) Donors’ interests may not remain
paramount, and they may not trust that they are getting unbiased advice
about which gift vehicle is best for them.
For more, including examples of ethical and unethical
practices related to this standard, go to the full 32 page Code on the AFP
website http://www.afpnet.org/ethics
– or pick up a copy of the standard, which is copied on the back of the AFP
Code statement on the handout table.
By the way, for organizations looking for ways to
provide incentives and boost the pay of effective development staff -
Fundraisers may ethically receive bonuses.
But for more information on that topic, tune into some
later segment of our ethics miniseries – Do Right while Doing Good.
