Monday, March 15, 2010

Preventing Exploitation and Putting Donors First

One of the issues I’ve seen arise from time to time, and on several occasions over the past few weeks, is controversies of contributions and donor intent when gifts are made by elderly and/or sick donors.

The situation is understandable. After all, many people wait to put their estates and wills in order until they feel it necessary because of old age or ill-health. Unfortunately, this situation can also lead to instances of donor exploitation and manipulation. Especially if a donor is in a weakened or limited condition, even the slightest nudge or suggestion can push the fundraiser across the ethical line.

Exploitation is a critical and sensitive issue for development officers when working with the elderly or infirmed. For fundraisers in this position, I highly recommend that you review the AFP Guidelines to the Code of Ethical Principles and Standards, which can be found here on the AFP website. The Guidelines are very helpful in that they highlight the underlying principles for each standard and provide examples of ethical and unethical behavior.

The guidelines to Standard 4 provide clear guidance to the development officer when working with elderly or infirmed donors. In particular, fundraisers should encourage a donor or prospect to seek independent professional advice when considering a gift. In addition, they should urge a donor or prospect to inform his or her family of their intent to make a gift.

It’s easy to see sometimes how controversies occur. Fundraising competition is fierce, and a fundraiser may realize that the donor doesn’t have much time left. Stress builds, and with funding tight, a few individuals might do something that they normally wouldn’t. We can’t let that happen, and we have to ensure that we always abide by the highest ethical standards.

Such situations underscore one of the most important principles in ethical fundraising: development professionals have a responsibility to put the interests of the donor ahead of their organizations and themselves.

3 comments:

  1. Could you perchance, comment on "laundering" of charitable gifts?

    For example, say it takes $25,000 to set up an endowment. The Donor gives $25k to #1 501(c)3, but asks that $5k of the original $25k be paid out to #2 501(c)3 by the #1 501(c)3.

    Bottom line: donor receives benefit and recognition of having creating a wonderful endowment with the original lump sum of $25k and no one is the wiser about the fact that #1 paid out $5k to #2.

    Is this acceptable practice? Couldn't this be construed as a sort of money laundering, raising red flags for audits?

    Is this legal?

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  2. BTW, Ms. Maehara, thank you for your forthcoming insights to the comment above and for your time.

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  3. Thank you for your charitable gift inquiry. From the information provided, it is hard to respond to your question in a meaningful manner. I would need to know the purpose of the endowment, grant criteria, how selections are made, etc., to be able to respond. If you can provide more specific information, I can be more specific. You can email paffairs@afpnet.org.

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