Ethics A Guiding Force In Fundraising

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A Guiding Force in Fundraising
     AFP Greater Toronto Chapter
          January 17, 2007

       Jeff Beach, Executive Director
            VON Canada Foundation
      Arthur Peters, Executive Director
                   Share Life
  Ethics – Today’s Context
• 80,000+ registered charities and many more
  non-profit organizations in Canada today
• Nearly all organizations raise funds
• Many techniques employed in fundraising
• Organizations must consider not just how to
  acquire funds, but accountability,
  responsibility and trustworthiness
• Extends to fiduciary responsibility in spending
  money that is raised
• Policies required to facilitate ethical
           Defining Ethics

• The discipline dealing with what is good and
  bad or right and wrong or with moral duty and
  obligation, a group of moral principles or set of
  values and the principles of conduct governing
  an individual or a profession
• Character or the ideals of character manifested
  by a race or people
“To give away money is an easy matter, and in any man’s power. But to decide to
   whom to give it, and how large, and when, and for what purpose is neither in
                 every person’s power, nor is it an easy matter.”
                          - Aristotle (384 – 322 B.C.)
    The Ethics of Philanthropy

• Are the wealthy obliged by the virtue of their
  status to be philanthropic?
• Ethics – applicable for mastering the arts of
  both raising and distributing funds for worthy
• Donor intent – ensuring that funds are utilized
  in the manner intended by donor (e.g.
  designated donations)
• Drawing lines – morality – what we should and
  should not do
             Historical Context

• Aristotle - virtuous behaviour and charitable
•   Tithing and stewardship
•   John Stuart Mill – Utilitarianism
•   Immanuel Kant – Rational intuition
•   Soren Kierkegaard – Passion based on faith
   Utilitarianism vs. Formalism

Thinking and acting ethically involves two major

    Utilitarianism: greatest probable good
    Formalism: the most rational universal duty
     (what is thought to be intrinsically “right”)
    Philanthropy under Capitalism

• Concern for the character of the recipient, not
  that of the giver
• Focus on solving the problems in this life, not
  on “saving souls for the next”
• Preoccupation with uplifting the community,
  not satisfying the conscience
• Carnegie‟s “Gospel of Wealth”
• The common good vs. self interests
       Principles of Ethics in

• Respect
• Beneficence
• Trust
           The Accountable
         Non-Profit Organization

The accountable non-profit organization is
  responsible for:
    Mission fulfillment
    Leadership on behalf of public interest
    Stewardship
    Quality
    Financial accountability
    Ethical fundraising
      Responsibilities of those
          Raising Funds

Fundraisers have a „triple agent‟
  responsibility to:
   The donors
   The organization
   The cause
             A Code of Ethics
              for Fundraising

• Role responsibility is basic to the nature of
  today‟s “code of ethics”
• Ethics in philanthropy involves values:
    Commitment beyond self
    Obedience to and commitment beyond law
    Commitment to public good
    Respect value and dignity of individuals
    Tolerance, diversity and social justice
    Accountability, openness and honesty
    Prudent application of resources
         AFP - The Association
     of Fundraising Professionals

• Professional association of individuals
  responsible for generating philanthropic
  support for non-profit and charitable
• Promotes and enforces principles of
  stewardship, donor trust and effective and
  ethical fundraising
    AFP Code of Ethical Principles
          and Standards of
        Professional Practice

AFP members aspire to Ethical Principles:
 Honesty, truthfulness, integrity
 Philanthropic mission above personal gain
 Inspire others
 Improve knowledge
 Value privacy, freedom of choice, interests,
  cultural diversity, respect
 Adhere to laws and advocacy of such
 Bring credit to the profession
         AFP Standards of
       Professional Practice

• Professional obligations
• Solicitation and use of
 philanthropic funds
• Presentation of information
• Compensation
      The Donor Bill of Rights

• To be informed of the mission and how funds
  will be used
• To be informed of who the board is and expect
  the board to be responsible
• To have access to financial statements
• Assurance that gifts are used for the purposes
  for which they are given
• To receive appropriate acknowledgement and
      The Donor Bill of Rights

• To be assured of confidentiality and respect
• To expect professional relationships
• To be informed whether solicitors are
  volunteers, staff or hired solicitors
• To have the opportunity of anonymity and to
  be deleted from “lists”
• Ability to ask questions and receive prompt
  and truthful answers
           Imagine Canada

• Launched in 2005 to support Canada's
  charities, non-profit organizations and
  community-minded businesses
• Gives voice to the work that they do
• Amalgamation of the Coalition of National
  Voluntary Organizations and the Canadian
  Centre for Philanthropy
       Ethical Fundraising and
    Financial Accountability Code

• Issued by Imagine Canada (formerly Centre for
• Set of standards and benchmarks that enables
  responsible management of funds and
  accurate & complete financial reporting
• Created in response to growing public concern
  about accountability in the sector
• Any Canadian charity can adopt
• Code can be used alone or in conjunction with
  ethical fundraising “trust-mark”
      Ethical Fundraising and
   Financial Accountability Code

Elements of the Code:
   Donor‟s rights
   Fundraising practices
   Financial accountability
           CAGP – Code of Ethics

• Canadian Association of Gift Planners (CAGP) also has
  a Code of Ethics
    Objectives
    Integrity and Role of Members
    Disclosure of Information
    Protection of Interested Parties
    Terms and Conditions of Gift
    Confidentiality
    Conflict of Interest
    Remuneration
    Competence
    Complaints
       Code of Ethical Practices

•   Philanthropic Experience
•   Privacy and Security
•   Disclosures
•   Complaints
•   Transactions
                  AFP e-Donor
                  Bill of Rights

Complimentary to Donor Bill of Rights:
    Organization name, mission, status, etc. on
    Access to alternative contact information
    Third party logos accurate and explained
    To be informed re. tax receipts
    Assured of safe, secure transactions
    Does contribution go directly to charity?
    Access to privacy policy
    Ability to opt out of solicitation, lists
                  Ethics in the Workplace

• While ethics may be personal, they take on a different scope when
   one becomes part of an organization.
• Many organizations are now including ethics as part of their
   employee and training programs
• Implementing an ethics program will lead to an organization that:
     Is accessible to diverse groups and individuals
     Attracts volunteers donors and supporters
     Strives for excellence
     Maintains the trust of the public
     Sustains a helping environment
     Is at a lower risk for legal actions against it
                 Ethics in the Workplace

• Benefits of managing ethics in the workplace
     Attention to business ethics has improved society
     Ethics programs help maintain a moral course in turbulent
     Ethics programs cultivate teamwork and productivity
     Ethics programs support employee growth and meaning
     Helps to ensure that policies are legal
     Ethics programs help to avoid criminal acts „of omission‟
     Ethics programs help to manage values associated with
      quality management, strategic planning, and diversity
     Ethics programs promote a strong public image
                Ethics in the Workplace
                 – Evaluating Decisions

• The „CLICK‟ model was developed for the Florida Power
    C – Consequence – what are the consequences if I do this?
     Who will benefit, who will suffer?
    L – Legal – is it legal? Are there considerations based on
    I – Image – Would I like to see this on the front page of the
     newspaper? Will this decision affect our public image?
    C – Culture – does this decision support or damage our
     organizations culture and values.
    K – Does it cause a knot in my stomach? Would my mentor or
     hero approve?
   Case Studies –
The Practice of Ethics
              New Thinking
         on Ethics in Fundraising
• Do current ethical standards go far enough?
• Importance of donor-based giving
• Eight elements of “new ethics”
    The way in which funds are requested
    Quality of information presented
    Communication focused on donor needs
    Requests respond to donor‟s schedule
    Donor recognition carefully used
    Calls made by volunteers as possible
    Gift is „right‟ amount and appreciated
    Each gift defines its own stewardship
• Every organization should review and endorse adoption
  of the Imagine Canada Ethical Fundraising and
  Accountability Code
• Review and endorse a Donor Bill of Rights (AFP,
• Policies must be in place which promote and safeguard
  ethical fundraising
    Gift acceptance
    Revenue sharing
    Other policies
• AFP – resource to consult with
• Other recommendations?
                  Final Thought…

“The question is, when so many others cut corners, shave
the truth, self-deal, believe in the fast buck, and follow the
crowd along the low road of least resistance, can we even
 afford to travel the high road of ethical behavior? Frankly,
we can't afford anything else. Any other competitive angle
is a pure crapshoot in today's business world. Companies
with shaky ethics and shabby standards will be crippled as
         they try to compete in our changing world.”

      Price Pritchett, American Psychologist and Entrepreneur

•   Anderson, A. (1996). Ethics for Fundraisers. Bloomington, IN: Indiana
    University Press.
•   Association of Fundraising Professionals (AFP) International (Various)
•   Better Business Bureau. (2003). Implementation Guide – Standards for
    Charity Accountability. Arlington, VA: BBB Wises Giving Alliance.
•   Burlingame, D.F., ed. (1997). Critical Issues in Fundraising. The
    NSFRE/Wiley Fund Development series. New York: John Wiley &
•   Burlingame, D.F. & Hulse, L.J. (1991). Taking Fundraising Seriously.
    San Francisco, CA: Jossey-Bass Publishers.
•   Canadian Association of Gift Planners (CAGP) (Various) www.cagp-
•   Collins Group. (2002). New thinking on ethics and fundraising. E-news
    from the Collins Group, Volume 1, Issue 2. Retrieved March 10, 2006

• Ethics is Power: Developing an Ethical Culture in the
    Workplace, Article by Carter
    McNamara: Complete Guide to Et6hics Management: an
    Ethical Toolkit for Managers.
•   Ethics Today: Personal, Practical and Relevant/, posted December 2003.
•   Holloway, R. (2003). Ethics in Fundraising. Retrieved March 10,
    2006 from
•   Imagine Canada (Various)
•   Minton, F., & Somers, L. (1997). Planned Giving for Canadians.
    Waterdown, ON: Somerville.
•   Riley, J. (1992). Philanthropy Under Capitalism. In D.F.
    Burlingame, (Ed.), The Responsibilities of Wealth. (pp. 67-79).
    Bloomington, IN: Indiana University Press.
•   Sweatman, J. (2003). Bequest Management for Charitable
    Organizations. Toronto, ON: Butterworths.

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