Integrated Values, Elevated Professionalism and Courageous Leadership
By Heather R. McGinness, CNM, CFRE
‘Ethical practices.’ These are two words that are absolutely essential to maintaining the credibility of not only the fundraising profession, but the collective credibility of our charities and organisations as a whole. They are also two words we often attribute more narrowly to our work than is prudent. We feel that if we’re not being compensated as a percentage of funds raised, are maintaining confidentiality about our donors and aren’t breaking any laws, we’re ethically fine. But are we?
As the number of charities doing active fundraising continues to rise, there is an unhealthy trend developing in our organisations. More and more, organisations are beginning to see themselves as competitors in the charitable marketplace. This sense of rivalry can lead to becoming overly focused on competitive strategies against other charities and causes, which becomes a distraction from giving attention to the reason the organisation exists in the first place — its mission.
A Word of Caution on Cost Ratios
Cost ratios are an excellent example of how an organisation’s desire to differentiate itself from other charities can cross into questionable ethical territory. All of us in the charitable sector are called upon to ensure budgets are managed in a way that demonstrates good stewardship of resources. Further, we are called upon to be transparent with our stakeholders and the public in regards to how funds are spent. This is part of the FINZ Code of Ethics and Professional Conduct, found within the ethical principle of Transparency. It states that FINZ members should stimulate clear reports about the work they do, the way donations are managed and disbursed and costs expensed in an accurate and clear manner. When an overabundance of attention starts being directed to bottom line financial numbers, however, unethical practices may begin to creep into an organisation’s approach to fundraising.
It has become the norm for prospective donors to research a charity prior to making a gift, especially as the option to access information from smartphones and other mobile devices has become widely available. Charities are wise to make a variety of meaningful information available via multiple channels for use in donor discernment, including the organisation’s cost ratios and financial data. This financial information must be used with care, however, for when cost ratios are used by an organisation as a differentiator in promotional materials, they soon become stumbling blocks.
The Potential Pitfalls of Slim Margins
For example, if your charity prides itself on operating with very slim margins, what happens during budgeting time if spending decisions are made that will shift those numbers? Would the result be a reciprocal amount of cuts that potentially limit operating capacity? Would fundraising goals rise to offset the expenses? Would there be temptation to make internal adjustments on which expenses are deemed programmatic and which are fundraising? While such changes could be made compliant with legal requirements, are those changes ethical in the context of a charitable organisation?
As professional fundraisers, it is important for us to speak up when these numbers are discussed and remind colleagues of why our donors give. While financial management has a role in charitable giving, donors give because they want to support our causes. Transitioning internal budget conversations from a place of minimising costs to maximising impact keeps us all focused on our missions and can help our organisations feel more at ease when sharing financial information. Our donors want our missions to be successful; the ability to be honest and confident in disclosing financial information grows out of a collective ethical commitment to properly serving our causes.
Related to elevated concerns around expense is the challenge of increased fundraising pressures. These pressures can manifest themselves internally in an organisation and externally in donor relationships, and both situations ultimately damage the ethics of our profession if not stopped.
For an example of an internal manifestation, imagine a situation where the fundraisers are meeting with leaders from various areas of their organisation. As the discussion evolves about how things will be funded, the word ‘targets’ replaces ‘donors’ and the fundraisers need to ‘hunt down the money’ for the cause. This may seem harmless, but when it becomes common practice it can adversely affect an internal culture of philanthropy and cause us to forget the core truth of fundraising — that fundraising is ultimately about relationships, not transactions.
Externally, these conversations can lead us to become prescriptive in developing proposals for prospective donors. Pressures to raise funds for one specific part of our cause or conditions that engender favouritism of gifts to one programme area over another can impact how we enter conversations with donors, as can pressures on timing of gifts. Certainly, it benefits both the organisation and the donor to share the breadth of opportunities for supporting the mission; prospective donors may resonate more with one facet of the cause than another. Likewise, if there is a sense of urgency connected to fundraising for a particular programme area, that urgency should be openly communicated.
Is the Agenda Pushing You Into Unethical Territory?
We verge on ethical grey areas by pushing agendas for giving rather than being sensitive to our donors’ desires and interests. A request for a gift should be a culmination of two-way dialogue between the donor and the fundraiser, and the goal should be a donation that results in satisfaction of the needs of both the donor and the mission. In CFRE International’s International Statement of Ethical Principles in Fundraising, it is stated under responsibilities of the fundraising professional that, ‘Funds will be collected carefully and with respect of donor’s free choice, without the use of pressure, harassment, intimidation or coercion.’
When is a line crossed regarding pressure?
‘Pitching’ a donor on a programme, convincing them as to why they should give to something different than they are naturally inclined, or rushing them to give sooner than they were planning are ethical pitfalls into which we may fall if caution is not used.
If we cease to see our donors as people with their own unique interests and motivations and see them instead as a means to an end, we are no longer treating them with the respect and dignity our code of ethics requires us to exhibit. According to the FINZ Code of Ethics and Professional Conduct, the ethical principle of respect states that FINZ members should act with respect for the dignity of their profession and their organisation and with respect for the dignity of donors and beneficiaries.
How can ethical congruency be maintained in our professional work? Clearly defined values that drive decision-making keep us on a path of high integrity. These may be our organisation’s articulated values, our own personal values, or a combination thereof, but consistent application of values facilitates consistent ethics. We must name, own and behave according to our values. As public benefit charities, we are held accountable to the public trust and must strive to hold ourselves and our causes to the highest standards. If all fundraising professionals act as a voice for ethics in all contexts of our work, we will collectively create conditions in which all our missions will flourish.
Heather R. McGinness, CNM, CFRE, is a nonprofit consultant and AFP Master Trainer, experienced in several areas of the philanthropic sector, including higher education, social services, associations and faith-based organisations. She currently serves as senior consultant and account executive with Meyer Partners. With over 18 years’ nonprofit experience, she has an extensive background in leadership and management; fundraising; marketing and communications; grant seeking; strategic planning and analytics.