Advancing Philanthropy

Ethics, Fundraising, and Leadership: The Relationship-Driven Approach to Ethical Fundraising

Every fundraiser I know has a story they can tell about a time they felt their ethics were being put to the test. The pressure to secure donations to keep your organization sustainable in an increasingly competitive nonprofit environment can put strain on the ethical boundaries that are so essential to preserving the integrity of our donors and the work we are doing.

These ethical tests often arise in situations where you aren’t quite certain how to respond to a donor’s question. You know the answer the donor is looking for, but you also know you don’t have quite the right response—such as when asked about your organization’s impact numbers, your overhead and efficiency as an organization, or how you’re “better” than other similar nonprofits in your space.

If donors don’t perceive that you or your organization are being honest, ethical, and transparent about what they can accomplish with their gift, they will look elsewhere. That is why it is so important to establish openness and clarity with donors through effective relationship-building techniques: to minimize the potential for ethical dilemmas by ensuring donor alignment from the very beginning.

Relationship-driven fundraising is a key foundation of the Cause Selling approach, developed through the San Diego-based Sanford Institute of Philanthropy, National University System. Cause Selling, which is based on the vision and experience of entrepreneur and philanthropist T. Denny Sanford, blends the passion of philanthropy with effective, research-based business principles, incorporating communication styles and proven business approaches to strengthen and align donor relationships for mutual benefit and fundraising results.

As we examine three key principles of this approach, consider how they could have helped you navigate past ethical tests.

#1. Emphasize sustained relationships over immediate results.

At their core, relationship-driven fundraising strategies are designed for the long haul. They require going beyond a transactional mindset to prioritize honest, proactive communication that inspires confidence and continually opens hearts, minds, and resources. The Cause Selling approach consists of an eight-step roadmap to donor relationship-building, starting with identifying which donors are more likely to be open to your cause—and aligned with your organization’s values—and then identifying specific relationship-building steps to ensure alignment and mutual benefit, leading to the final “ask.”

The quality of your relationship and alignment with each donor is the competitive advantage that enables you, as a fundraiser, to succeed in the competitive nonprofit sector, and through relationship-building both you and the potential donor can establish a better sense of whether goals, priorities, and other factors are truly in sync.

#2. Listen donors into giving  instead of talking them into it.

Active listening is unfortunately one of the most neglected skills in philanthropy. That’s because many fundraisers feel they must tell prospective donors every detail about their organization and its efforts (in order to demonstrate a real need and score a quick win). While storytelling is an essential part of any organization’s outreach strategy, so is listening.

When a donor feels their passions and motivations are understood, and the cause is truly aligned with their own personal mission, they feel valued, resulting in a more positive reaction when they’re ultimately invited to contribute. It is possible to develop stronger listening skills (and the donor’s confidence in them) through a deliberate process that includes being particularly aware of avoiding prejudgment, being patient, taking notes, asking thoughtful questions, and discerning nonverbal messages.

#3: Ensure organizations and their donors reflect each other’s missional values.

Without fail, the most ethically grounded organizations I’ve ever seen have a code of conduct embodied by each member, including—and especially—senior leadership. Just as effective fundraising organizations require staff to follow clear rules about ethical issues, fundraisers also need to evaluate how closely those principles align with that of potential donors.

chart showing different phasesFor example, donors may not always be forthcoming with their reasons for wanting to donate, so making sure you have a strong understanding of their primary motivations can provide insight into alignments. Doing so means asking the right questions to assess whether the relationship has a strong prospect for success. This includes motivation recognition, searching for the right causes, evaluation of alternatives, donation decision, and post-gift evaluation. Collecting the information needed to make such a decision takes time and effort. However, it’s much easier to understand and establish ethical alignment at the beginning of a donor relationship.

Remember, though, this relationship works both ways. If donors can’t trust your organization to make the best use of their money, they will look to steward it with someone who can.

It is always a relief when the “right thing” to do and the “smart thing” to do are one and the same. At the beginning of this piece, I invited you to think back on a past ask that could have gone better. As we close, I encourage you to consider how to leverage the powerful elements of relationship-building, which can set the stage for more honest, transparent, and effective donor interactions.

Tony Beall Tony Beall is a trusted and award-winning social enterprise leader with 20 years of diverse nonprofit experience from organizations all across the United States. Tony currently serves as director of the Sanford Institute of Philanthropy, which was created through the generous support of T. Denny Sanford in collaboration with the San Diego-based private, nonprofit National University System. For more information visit sanfordinstituteofphilanthropy.org.

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15 Nov 2019 President's Perspective Blog
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