Sections of this topic
A note from a reader:
Hank, I am a volunteer for a nonprofit organization that has been approached by “professional fund raisers” that are looking for “up-front” fees to raise money for us.
In my experience, and I have paid out thousands of dollars to these individuals that promise you the moon and when it comes time to deliver … the excuses abound.
The professional fundraisers say it is unethical to pay a percentage on the money raised. Is it not unethical to take money from a non profit and not deliver?
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My immediate reaction to the phrase “professional fund raiser” is one of anger and disgust — feelings that are directed at both the “fund raisers” and those who hire them.
It’s okay for an organization to hire a fundraising professional to work with them to create/implement/maintain a productive, cost-effective fundraising program. It is an extremely bad idea for NPOs to hire outsiders to raise money for them.
No outsider can speak with the conviction and passion for an organization’s mission as can board members, staff, volunteers and the people served by the NPO.
Outsiders, if they are asking people for money on a face-to-face basis, can, of course, fake it. So the organization has to decide if that’s who they are … people that hire others to “fake it.”
If outsiders are raising the money, two questions that must be asked are: (1) how much of the money that is raised will actually get to the NPO; and, (2) will the people giving the money or paying to attend an event be informed, as is their right, of how much of their money will go in the “professional’s” pocket and how much to the nonprofit ??
Also, the “fund raiser’s” fee should be agreed upon in advance – based on the time and effort needed to make it happen (not based on dollar goals or dollars raised), and included in a contract that specifies what services will be provided in what timeframe.
No “fund raiser” should have their full fee paid up-front. That’s just bad business, and you’d certainly not want your donors to know that you do that.
If those “professional fund raisers” can guarantee that “X” dollars can/will be raised, then they should have no problem putting that guarantee in a contract. The NPO will then have recourse (with State support) if the goal is not met !!
And, FYI, most States have an office (usually the Secretary of State) that oversees and regulates fundraising, and many require that copies of contracts with “fund raisers” be provided to the State for approval. Many also publish lists of “professional fund raising” companies and their track records in their States.
There are a few “professional fund raisers” that operate ethically, that raise money at a fairly low cost-per-dollar-raised, but the majority of the firms that I’ve seen listed on State reports forward too little of the money raised to the NPOs; and, high fundraising costs raise ethical questions, and suggest that the nonprofit is poorly managed.
Too many nonprofits are created by well-meaning people who have no clue about what’s involved in running/maintaining an organization; and, nonprofit organizations with leaders who won’t take the time to learn what they should be doing, and then won’t do what they should, should probably not survive. Hiring an outside “fund raiser” is the often leadership’s way of not having to do what nonprofit leaders are supposed to do.
As to the last two points in the email….
• You can’t lose money on a fundraising professional. You can ignore their good
advice/direction, but you will have gotten value for the fee you paid.
• If a nonprofit is paying a “fund raiser” in advance, it’s the organization, as much as it is
the “fund raiser,” that is acting unethically.
• Taking money without delivering what was promised sounds to me like “fraud.”
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Have a comment or a question about starting, evaluating or expanding your fundraising program? With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, I’ll be pleased to answer your questions. Contact me at [email protected]
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