Fundraising Ethics Revisited

Sections of this topic

    A couple of months ago I wrote my first posting on fundraising ethics. In that posting I posed three questions — three situations that required ethical resolutions. And, although there have been a few emails from readers that related to ethical questions, the situations that I posed have not been addressed.

    So, in the context of the rights of the donor, the public’s right to know, the appearance/reality of conflict-of-interest and how those issues impact the people served by a nonprofit organization, I’ll try to address those questions … without giving direct answers.

    1. Is it ethical for an NPO to hire a firm to run a “fundraiser” where the NPO realizes $10,000 it wouldn’t
    have had, while the vendor actually retains 90% of the generated income ??

    Would your donors feel comfortable giving to you if they knew that only
    10% of their giving would actually go to help the people you serve?

    Would you inform the people paying to attend your fundraisers that
    only 10% of their giving would actually go to help the people you serve?

    If you wouldn’t so inform the attendees, why not?

    Would you want to see that information on the front page of your local
    newspaper? If not, why not?

    Where the cost of most fundraising doesn’t exceed 20%, is it reasonable
    to use a fundraising method that costs 90% of the gross?

    2. Is it ethical for a major donor to a hospital to get his/her child moved to the top of the “treatment” list ??

    How would the parents of children already on the waiting list react
    to having someone jump to the head of the line?

    How would the public react to an article on the front page on the
    local newspaper that children in need of treatment were delayed
    in getting that treatment because a major donor got “special

    What would happen to an institution’s reputation of being fair and
    caring? …or don’t people care?

    3. Is it ethical for the CEO of a nonprofit to recruit family members to serve on the organization’s board ??

    How would current and potential donors react to learning that the
    CEO’s family has a vote on what the CEO is paid?

    Assuming that the CEO and his/her family members are in
    agreement on the issues that the CEO must decide, would the
    public see the decision-making process as one designed to
    benefit the community? …or the CEO and his/her family?

    A good rule of thumb (but not the only rule) to use in judging whether something is or isn’t ethical is whether it feels right. If you’d rather not see it on the front page on your local newspaper, then it probably doesn’t pass the smell test.


    Have a comment or a question about starting, evaluating or expanding your fundraising program? Contact With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, he’ll be pleased to answer your questions.