Ethical Standard Deep Dive: Standard 8

Throughout the month of October, members of the AFP Ethics Committee will be addressing each of the standards in our Code of Ethics. Jason Lee discusses the fundraiser’s ethical responsibility when entering into contractual relationships.

< See All Ethical Standard Deep Dives

Standard 8: Members shall establish the nature and purpose of any contractual relationship at the outset and will be responsive and available to organizations and their employing organizations before, during and after any sale of materials and/or services.

Jason: Ensuring the meeting of the minds is a fundamental element of any contractual relationship. What is the nature of the relationship (e.g., independent contractor?), what is the duration of the relationship, what is the fee arrangement, and what is the end goal of the parties? These are among the key questions that must be answered at the beginning before a contractual agreement is drafted, and certainly before it is signed.

Ambiguity is the enemy of mutually attainable goals. Particularly for smaller organizations that might not have legal sophistication, it is important to be clear about all the various contractual elements and perhaps provide a timeline/scope of work to create a mutually agreeable path forward. It is equally important to ensure that any agreement complies with other standards of the AFP Code of Ethics (e.g., avoiding any compensation structures that would implement commission-based compensation, an approach that is prohibited by the Code).

As a best practice, it is essential to be responsive to a client/organization throughout the term of the contract to ensure that their needs are met. Particularly if the contract involves the use of materials, services, or fundraising tools that are new to the client/organization, it is imperative to be a valued, responsive partner each step of the way to train them and provide the nuanced customer service to make sure that those resources are optimally and efficiently utilized.

Guidelines

• Members shall comply with all fair and reasonable obligations created by the contract.
• Members shall enter negotiations on a contractual relationship to provide products, materials or services openly and transparently.
• Members shall respond in a timely manner to requests for information or clarification from a client.
• Members will provide for an effective method of follow up on the sale and/or implementation of any products, materials or services supplied. Any proposed further charges resulting from this follow up shall be transparently communicated.
• Members shall honor the explicit obligations of their contract and work proactively with the client to meet any fair and reasonable requests implied by the contract.
• Members shall file copies of the contract with all relevant regulatory bodies.
• Members shall heed national, as well as local (e.g., state, provincial, etc.) contract laws.
• Reference also Standard 5.

Examples of Ethical Behavior

1. Taking due responsibility for the delivery of goods, products and services as stipulated by the contract and providing the appropriate support mechanisms for these services.
2. In advance of the provision of any products and/or services to another party, the member provides a proposed contract for the sale of such items.
3. Working in good faith with a donor, client or nonprofit organization with whom the member has a contractual relationship to resolve perceived failures of performance in a timely manner.
4. Complying with the terms of an agreement without the necessity of a demand by the other party(ies).
5. Responding promptly, clearly and accurately to requests for information.

Example of Unethical Behavior

1. Attempting to deceive another party(ies) into acting in a manner that exposes the party(ies) to liability under the contract.
2. Conveying false or exaggerated information.
3. Changing the scope or purpose of a proposed or existing agreement without the knowledge and consent of the other party(ies).
4. Failing to respond to the reasonable inquiries of a party(ies) with whom the member has a contractual relationship.
5. Deceiving, by act or omission, the purchasing organization regarding the fees, suitability, or availability of a product or service.
6. Imposing or demanding obligations or any other elements that go beyond the scope of the agreed upon contract.

Supported by: 
The Claudia A. Looney Fund for Ethics in Fundraising
&
The Patricia F. Lewis Ethics Endowment Fund