Ethics in Fundraising AFP JULY 2020 WEBINAR PRESENTED BY: Alisha - - PowerPoint PPT Presentation

Ethics in Fundraising

AFP JULY 2020 WEBINAR PRESENTED BY: Alisha Johnson Perry, FirstLine Schools Gia Soublet, PhD, Soublet Consulting

What is Ethics?

The discipline dealing with what is good and bad and with moral duty and obligation. – Merriam-Webster Dictionary “…an inner drive to improve the quality of life through the causes they serve. They serve the ideal of philanthropy, are committed to the preservation and enhancement of volunteerism; and hold stewardship of these concepts as the overriding direction of their professional life. They recognize their responsibility to ensure that needed resources are vigorously and ethically sought and that the intent of the donor is honestly fulfilled.” – AFP Code of Ethical Standards

TRUE OR FALSE? Ethics is an exact science.

TRUE OR FALSE? Ethics is an exact science.

INTERNAL

★ Worker health & safety ★ Workplace free of harassment or discrimination ★ Fairness / equal

• pportunity in all HR

activities (hiring, firing, promotion) ★ Moral common sense (e.g. prevent harm, respect, honesty, promise keeping, charitable, model behavior) ★ Observing letter and spirit

• f law regarding nonprofit

internal activities

EXTERNAL

★ Truth in fundraising, marketing & PR ★ Meeting obligations to donors, vendors, and external stakeholders ★ Maintaining donor’s personal data in a secure manner ★ Providing high quality service to constituents ★ Ensuring product safety ★ Protecting the environment ★ Observing letter and spirit

• f law regarding nonprofit

external activities

TWO-FOLD RANGE OF ORGANIZATIONAL ETHICS

❖ Our organization’s internal code of ethics

➢ Board approved development/ fundraising policies; workplace commitments

❖ Independent Sector

➢ Interim sanctions; Principles of Good Governance

❖ Association Fundraising Professionals (AFP)

➢ Code of Ethics; Standards of Practice

❖ Association of Healthcare Philanthropy (AHP) ❖ Council for Advancement and Support of Education (CASE) ❖ Giving Institute ❖ Donor Bill of Rights (AFP , AHP , CASE, Giving Institute) ❖ National Association of Independent Schools ❖ Making Ethical Decisions (Josephson)

KEY SOURCES OF GUIDANCE ON ETHICS

Association of Fundraising Professionals CODE OF ETHICAL STANDARDS Adopted 1964; amended Oct. 2014 AFP believes that ethical behavior 1) fosters the development and growth of fundraising professionals and the fundraising profession and 2) enhances philanthropy and volunteerism. For the list of 25 ethical standards, visit: https://afpglobal.org/ethicsmain/code-ethical-standards KEY language: “MEMBERS SHALL/ NOT….”

Descriptive Ethics

Factual accounting

• f what is occurring

Normative Ethics

Ethical judgments concerning right and wrong, and attempts to describe what

• ught to be

COMMUNICATION OF ETHICS FALLS INTO THREE MAIN AREAS Metaethics

Abstract discussions concerning issues such as cultural differences,

• bjectivity, and

differences between scientific and religious ethical systems

Descriptive Ethics

(Factual accounting of what actually is

• ccurring - no

judgment)

Mere reporting that the situation above has occurred.

Normative Ethics

(Ethical judgments concerning right and wrong, and attempts to describe what ought to be)

There is a code of ethics that deems what is right and wrong.

Situation: ABC Charitable institution considers it wrong to pay a finder’s fee to a financial planner who brings forward a planned

• gift. XYZ Nonprofit has paid a finder’s fee on several occasions.

Metaethics

(Abstract discussions about cultural differences,

• bjectivity, and

differences between scientific and religious ethical systems)

No right or wrong,

• nly mere

acknowledgement that there is clear disagreement on practice and custom between different

• rganizations.

Whose point of view should guide our ethical standards, particularly when some decisions are not as clear as following the rules?

The donor’s.

66% of Americans said they have a great deal or fair confidence in charities. 34% said they have little or no confidence in charities. Yet, 80% believe charities do a very good or somewhat good job

• f helping people.

Chronicle of Philanthropy study (2015)

The Donor Bill of Rights

Guides organization’s ethical practices from the Donor’s Point of View

Philanthropy (financial, volunteer in-kind)

Donors’ voluntary action Donors’ trust and respect of the fundraiser/ organization meeting a need

Common good

DONOR’S BILL OF RIGHTS

1. To be informed of the organization's mission, of the way the organization intends to use donated resources, and of its capacity to use donations effectively for their intended purposes. 2. To be informed of the identity of those serving on the organization's governing board, and to expect the board to exercise prudent judgment in its stewardship responsibilities. 3. To have access to the organization's most recent financial statements. 4. To be assured their gifts will be used for the purposes for which they were given. 5. To receive appropriate acknowledgement and recognition. 6. To be assured that information about their donation is handled with respect and with confidentiality to the extent provided by law. 7. To expect that all relationships with individuals representing organizations of interest to the donor will be professional in nature. 8. To be informed whether those seeking donations are volunteers, employees

• f the organization or hired solicitors.

9. To have the opportunity for their names to be deleted from mailing lists that an organization may intend to share. 10. To feel free to ask questions when making a donation and to receive prompt, truthful and forthright answers.

ETHICAL FUNDRAISING DILEMMAS

Professional fundraiser (with personal accountability) must resolve ethical conflicts through three steps when the

• rganization (to whom he/she/they have loyalty/ fidelity)

decides to use funds given for one purpose by a donor (owed promise keeping, integrity, and honesty): 1) Take into account and reflect a concern for the interests and well-being of all shareholders (constituents included) 2) Uphold ethical values and principles over non-ethical ones 3) Violate an ethical principle only when it is clearly necessary to advance another true ethical principle which according to the decision maker’s conscience will produce the greatest balance of good in the long run.

ETHICAL DILEMMAS RELATED TO CURRENT EVENTS

COVID-19

Redirecting restricted funds raised for one project/position to an emergent need

• Postponement/Cancellation of Sponsored events
• Organization restructuring that changed/removed a

funded position Balancing the sensitivity of the donors’ needs with that

• f your constituents’ needs
• Striking the right tone: empathetic advocacy

Brian Saber, President of Asking Matters

(our emphasis on “YOU” added below)

ETHICAL DILEMMAS RELATED TO CURRENT EVENTS

HEIGHTENED AWARENESS OF RACIAL INEQUITY

Donor selective with whom they will communicate/conduct business Donor makes large gift, but openly exhibits bias towards a specific population Organizational misrepresentation of mission and values to solicit funds and/or ingratiate donors.

The past few months have been challenging, testing all of our

• limits. At the same time, it has also been amazing to see more and

more folks owning their complicity and power, being bolder, and challenging established norms. Our communities cannot afford for us to doubt ourselves, be too deferential, or always default to philosophies and processes that we were trained in.

• Vu Le of Nonprofit AF blog post

Your president has informed you that she intends to eliminate a program and use all prior gifts to that program towards a new renovation project. You remind her of the importance of honoring the donors’ intent; however, she is not concerned. As the development officer who secured these gifts, how do you handle this situation?

Ethical Scenario

You are working with a prospective donor on a major gift and prospect research discovers that at least one source of his income is (allegedly) from an illegal business. Do you pursue the gift and ensure the funds are separate from his abhorrent business activities?

Ethical Scenario

Do you pursue the gift and ensure the funds are separate from his abhorrent business activities?

Ethical Weigh-in

Resolution of the Conflict between two goods starts with acceptance that there are only ethical questions as philosophy and practical application clash.

GOOD

• philanthropy that

supports an

• rganization serving the

public good.

GOOD

• high moral standards
• n whom to accept

gifts based on donor actions and reputation

FUNDRAISERS’ ROLE IN RESOLVING COMMON ETHICAL DILEMMA OF THE TAINTED GIFT VERSUS

Do you pursue the gift??

Ethical After Thoughts

A Trustee makes a multi-million dollar gift to support a new performing arts center, then independently selects the architectural firm that will design the building. In fact, the donor makes fulfillment of her gift contingent on using her chosen firm. How do you proceed?

Ethical Scenario

REMINDER: three duties of the board of directors.

A. Duty of Prudent care: requires directors to exercise responsibilities in good faith with diligence and skill of prudent person, assuring fundraising excellence. B. Duty of Loyalty: Directors must avoid acting in any manner that may harm the NPO or result in director’s financial gain. Is pursuant to state and federal tax law. C. Duty of Obedience: Requires that a NPO carry out its mission.

Donor Intent (disinterested generosity) + Lack of Donor’s Financial Benefit = CHARITABLE GIFT

State and federal courts have required both a subjective and objective test: 1) SUBJECTIVE: Donor’s intent is of “disinterested generosity” to support a charitable mission. 2) OBJECTIVE: Gift does not include any financial benefit or quid pro quo returned to the donor in exchange for the gift.

During a lunch visit with a major gift prospect, she informs you that, "I will not continue supporting your organization if you continue to serve _____(insert bias)." Do you continue pursuing this gift or walk away? What is your response to the donor in either decision?

Ethical Scenario

A donor invites you to stay at his home during your upcoming trip… ...and reminds you to bring your swimsuit. What is your response?

Ethical Scenario

An Ethical Framework

• Recognize the ethical

issue

• Get the facts
• Evaluate options
• Make a decision and

test it

• Evaluate and reflect on

the outcome

❖ Our organization’s internal code of ethics

➢ Board approved development/ fundraising policies; workplace commitments

❖ Independent Sector

➢ Interim sanctions; Principles of Good Governance

❖ Association Fundraising Professionals (AFP)

➢ Code of Ethics; Standards of Practice

❖ Association of Healthcare Philanthropy (AHP) ❖ Council for Advancement and Support of Education (CASE) ❖ Giving Institute ❖ Donor Bill of Rights (AFP , AHP , CASE, Giving Institute) ❖ National Association of Independent Schools ❖ Making Ethical Decisions (Josephson)

KEY SOURCES OF GUIDANCE ON ETHICS

Alisha Johnson Perry, Director of Development FirstLine Schools ajohnson@firstlineschools.org 504-421-1060 Gia Soublet, Principal Soublet Consulting soubletconsulting@gmail.com 504-256-1982