Monday, August 27, 2012

Paying a fund-raiser a percentage of the income… a big bad no!

Okay, so the heading gives it all away.  So why bother writing an entire blog about it?  Because as time goes on this is one of those topics that everyone (well intending) will bring up at some point.  Can you pay your fund raiser a percentage of the income they generate?  Simply put: No.  In all actuality, the State of Maryland prohibits registered fund raising consultants from accepting this type of payment arrangement.  Additionally, it is unethical for many reasons.

Development staff (whether full-time or on contract) spend their time developing relationships and strategies that are intended to benefit an organization for years to come.  The donors that make donations to these organizations, do so in good faith that the funds they provide will help greater the mission of the organization.  When utilizing development professionals, the organization must make this cost a part of their operating budget.  

I believe the The Association of Fundraising Professionals (AFP) handled this topic best when it made the following statements in a 1992 position paper on the topic:
“The Association of Fundraising Professionals (AFP) believes that individuals serving a charity for compensation must accept the principle that charitable purpose, not self-gain, is paramount. If this principle is violated and percentage compensation is accepted:
  1. Charitable mission can become secondary to self-gain.
  2. Donor trust can be unalterably damaged.
  3. There is incentive for self-dealing to prevail over donors’ best interests.
  4. In addition, percentage-based compensation, however administered, can produce reward without merit.
AFP holds that percentage-based compensation encourages abuses, imperils the integrity of the voluntary sector, and undermines the very philanthropic values on which it is based. AFP is restoring to its Code of Ethical Principles a statement that prohibits members from working for percentage compensation or accepting finder’s fees."

Unfortunately, in these stressful economic times, organizations must do everything in their power to stretch their budgets.  And, having worked in the non-profit sector for as long as I have, I understand the necessity in being efficient and prudent in utilizing operating funds.  That is why I also encourage organizations to examine their development staff and programs as a whole.  Using both a bird’s eye perspective to gauge overall success, in addition to utilizing the same methods that you would to determine salaries for all other staff and contract positions – are the only ways to ethically measure appropriate compensation for your fund-raiser. 

No comments:

Post a Comment