Imagine this. Your nonprofit organization is short on funds. A former co-worker tells you she knows someone looking to give $25,000 to an organization like yours. She says, “I’ll introduce you and facilitate the process if you give me 10 percent of whatever she gives you. You know, a finder’s fee.”
Or what about this. Your neighbor says your organization is a perfect fit for grants being made by the Obama administration. He says, “I’ll write the grant. If you get it, you pay me 10 percent. If you don’t get it, you don’t have to pay me.”
What do you do?
The above scenarios might seem ideal. You don’t have to do anything and your organization will financially benefit. You don’t have to hire staff, engage board members or spend a lot of your own time trying to secure a gift that may or may not come through. Do you say yes or do you try to reposition the offer?
As appealing as it may seem, both of the scenarios violate the Association of Fundraising Professionals Code of Ethical Principles. That’s right. Fundraising is a profession and fundraisers have a professional association that develops ethics and monitors adherence.
Ethical standard 24 from the association’s code of ethics states, “Members shall not pay finder’s fees, commissions or percentage compensation based on contributions and shall take care to discourage their organizations from making such payments.”
Here is the reasoning. Raising funds for a nonprofit is about obtaining the resources needed to advance the organization’s charitable or social mission. Importance is placed on retaining the trust of donors and ensuring that funds are used to fulfill the agreed upon social mission. Percentage-based compensation and finder’s fees can give rise to betrayal of philanthropic trust in an attempt to secure a larger gift and related fee.
Also, most people don’t give because of the skill and talent of your fundraiser. They give because they had a positive interaction with someone associated with your organization or because of a belief in your work. For the above scenarios, ask your coworker if she would volunteer to make the introduction because she believes in the value and impact of your organization. Ask your neighbor if he would write the proposal for a flat fee or hourly rate. Fundraising relies on volunteers and paid staff or contractors. It’s okay to pay fundraisers. Just don’t pay percentages.
Learn more about fundraising ethics at www.afpnet.org/ethics.