Advancing Philanthropy

Fundraising Tools: Ethics and You — Tackling Ethics Questions

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Various professionals discuss AFP’s Code of Ethical Standards and what it means to them

When she was in college in California, Dana Patterson knew that she wanted to work in the nonprofit sector, taking a class in grant writing after graduation in 2016 to help her along. With guidance from a mentor, she embarked on her career, eventually tapping the resources of professional organizations such as the Association of Fundraising Professionals (AFP) to hone her skills and learn best practices. She figured that one key to success would be to follow her sense of what is right.

“I identify as a good person. I identify as ethical,” says Patterson, who was recognized this year as one of AFP’s Outstanding Young Professionals. “But to be honest, I didn’t think a lot about ethics when I entered the field. It wasn’t as explicit then as it is now for me.”

Over time, she learned about AFP and other groups, where professionals showed her the importance of following an ethical code.

“At first it all seemed a little hokey—of course we are ethical. But then, as you follow the discussions, you start connecting with grant pros and you see how the code of ethics really guides the profession and how it really strengthens the profession,” says Patterson, who is director of development for Kidango Inc. in Fremont, California. “Now I follow it, and I reference it, and I love using it to spark conversations and to stimulate debate. I like to witness how different people have different understandings of situations, which deepens my understanding of what is at stake.”

AFP’s Code of Ethical Standards, which can be found on the organization’s website, first was adopted in 1964 and was amended in 2014. This year, AFP embarked on another review to further modernize it. Advancing Philanthropy recently interviewed Patterson and several AFP members of varying backgrounds, ages, experiences, and locales to get their insights into the code and what they deem most important, as well as where they think it can be improved.

Trust Is Everything

When it comes to ethics, the experts point to how the concept is a simple matter of trust and how integrity defines fundraising professionals, as well as the organizations they work for and with.

Luis Francisco Pacheco
Luis Francisco Pacheco

While ethics is fundamental to every profession, it is essential to fundraising, notes Luis Francisco Pacheco, an AFP member who works in Mexico.

“Not only because it guides and regulates the practice, but also because it is the touchstone on which any decision and activity we perform must rest,” says Pacheco, who was born in Mexico City and came from a family where service to the community was paramount. “One of the most important aspects of fundraisers is the trust they can instill in those they summon to join and support a cause. Their credibility rests on their ethics.”

At 15, he worked with indigenous communities and started collaborating with a women’s weaving cooperative in Mexico. Since that first experience more than 30 years ago, fundraising has shifted from a challenge to a passion, he adds.

“Ethics is not an external and subsequent exercise to fundraising, but it must be the starting point to be able to think and propose any fundraising exercise,” Pacheco says. “A fundraiser is first and foremost the builder of philanthropic culture, which is impossible without ethical reflection at the heart of the process.”

Trust Builds Relationships

Bret Heinrich, MFA, CFRE, president and CEO at Wings of Hope based in St. Louis, teaches a master’s level course at Washington University in St. Louis that focuses on corporate leadership. Ethics was one of the first courses he taught at the college level, which allowed him to weave relevant points into his current management class.

“It’s critical to decision-makers in the nonprofit sector,” says Heinrich, who is an AFP Global Board member.

Bret Heinrich, MFA, CFRE
Bret Heinrich, MFA, CFRE

He tells his students about the difference between the transactional nature of retail sales—how buying a shirt is the end of that exchange—and the relational nature of working in the nonprofit sector.

“We are all about relationships. They are absolutely at the cornerstone of everything we do,” Heinrich says. “We align people’s personal values and beliefs with the mission of the organization, and that is absolutely dependent on trust. Every relationship we know is based on trust—so ethics is at the heart of everything we do as fundraisers.”

As people move through their careers, they become more confident in those connections, he adds. But relationships can be fragile.

What I am concerned about are the folks who don’t have that breadth of experience or confidence and could put themselves in a bad situation. We need to educate the staff within the development department but also throughout the organization about why we do what we do and what donors expect of us.

—Bret Heinrich, MFA, CFRE, president and CEO  at Wings of Hope

“What I am concerned about are the folks who don’t have that breadth of experience or confidence and could put themselves in a bad situation,” Heinrich says. “We need to educate the staff within the development department but also throughout the organization about why we do what we do and what donors expect of us.”

Kay Sprinkel Grace, FAFP
Kay Sprinkel Grace, FAFP

Kay Sprinkel Grace, FAFP, who has written several books on philanthropy during her long career, points out that philanthropy work is centered on communities, where reputations for integrity are paramount.

“I want to believe you, and I want to believe what you tell me is true. That is true in my personal life and in my professional life,” says Grace, who operates an international consulting firm, Transforming Philanthropy, in San Francisco. She also is AFP’s 2020 Outstanding Fundraising Professional of the Year. “If you have integrity, I’m in, because I need to trust you.

 “I am a big believer in excellence, and one of the ways you achieve excellence is through integrity. And I don’t want anybody to think that we don’t have integrity as a sector,” she says. She suggests that nonprofits retain a high level of public confidence while that support has declined in other areas, such as politics and business. “So, when I hear a story about someone who violates our ethics it makes me cringe, because I know that it breaks down the trust with the people involved with all nonprofits.

“When one errs, people look at the entire sector as errant,” she says. “People want to believe us, so what we tell them, they believe. If we fail to meet those expectations, it can sour donors from wanting to give in general. All it takes is one ethical breach—and the giving goes down because the trust is broken.”

Avoiding Ethical Breaches

To avoid issues, training becomes critical, and a clearly written code of ethics creates a firm foundation. All levels of an organization—from board members to executives to professional fundraisers to office staff to volunteers—must understand their obligations, several observers point out.

Joyce Mitchell-Antoine, CFRE
Joyce Mitchell-Antoine, CFRE

“A code of ethics should not only help provide guidance for and protection for fundraising professionals, but it should also help donors, volunteer board members, and organizations,” says Joyce Mitchell-Antoine, CFRE, the chair of AFP’s Ethics Committee who manages the Planned Parenthood South Atlantic office based in Raleigh, North Carolina. “Those codes really are critical so that people have the guidance they need to make the decisions to keep fundraisers above reproach and to protect donors and organizations.”

At times, when ethical breaches happen inadvertently, she and others say a code can remind everyone of their responsibilities.

“People can get themselves into uncomfortable situations trying to do good and to help others,” Mitchell-Antoine says. Well-intended donors might offer seemingly minimal perks such as tickets to a show or access to a vacation home, which might put personal gain over the philanthropic mission. “Donors really want to make an impact, but they sometimes can create uncomfortable situations with a conflict of interest or legal issue. A code of ethics will ensure that what we are doing not only protects the organization but also the fundraising profession, as well as the donors.”

Donors have strong connections to the organizations they support. At times, the lines of who owns relationships—the organization or the fundraising professional—can be blurred. When a staff member changes organizations, it can be difficult to know whether it is OK to solicit donations from those previous relationships for other causes, Mitchell-Antoine adds.

“That sounds innocent enough—but the people who give to an organization are an organization’s donor. They are not ours,” she says. “That is one example of why ethics are needed for fundraisers themselves.”

Donor Privacy

The current code includes language about protecting the privacy of donors. Ill-trained workers or volunteers at a nonprofit might think it is interesting to talk about the results of a silent auction, not realizing they are violating confidentiality requests, Heinrich says. The code of ethics can be used to train people in what is OK and what isn’t, he and others say.

Donors appreciate written rules protecting their privacy, while also ensuring they know exactly how their gift is going to be used. Donors then feel confident about their choices, whether they are donating their time or money, Heinrich says.

That trust must be there among all stakeholders in an organization, Patterson says, adding that “privacy should 100 percent be respected.”

“Everyone along the chain is trusting you as a fundraising professional,” Patterson adds. “You are building relationships with grantors, individual donors, and community members, and a code of ethics will increase trust by making everything more bona fide.”

Compensation Questions

The AFP Code of Ethical Standards has guided her through some murky areas. Early in her career, Patterson says, it made logical sense to her that someone would be paid a percentage of the amount of money that they were able to raise.

“That is a common practice in sales,” Patterson says. Through experience, she realized how that could create conflicts of interest for a fundraiser. The code of ethics offered guidance. Her compensation when doing consulting work is based on either a flat fee or hourly wage. She now can explain to others how compensation should work, including people connected to smaller organizations that might not have the resources to join a professional organization such as AFP. (She also is a member of the Grant Professionals Association.)

When she gets the question about compensation from potential donors, she will alert them if she hears that they are talking to someone who is asking for a commission.

“I let them know that it is a red flag. I let them know to stay clear of that. And I can give people the link to the code,” Patterson says. “That will strengthen my personal credibility, but it also strengthens the profession. I see myself as actively building the culture in how we respect fundraising and grants writing. And the code of ethics guides that for me.”

Heinrich says issues surrounding compensation are common. When organizations hire outside consultants, the question is sure to come up, and organizations need to explain how a fundraiser’s primary motivation shouldn’t be about pay.

“You don’t want them going after people,” Heinrich says. “We want them to build authentic relationships.”

Campaign managers or full-time development people should be salaried, while consultants might be paid flat fees for a specific job from beginning to end, he says.

Grace asserts that it is important to have those discussions about compensation because a lot of business-oriented people don’t understand that ethical guidelines are different for philanthropy. She mentioned an example where an unethical fundraiser charged an organization a commission that equated to about 1% of a $20 million donation—or $200,000—for a gift that she, personally, had sourced and worked on. Without her knowing until after the fact, the fundraiser had taken credit for the gift and charged the nonprofit a percentage fee in addition to his monthly retainer.

“That is not ethical,” she says. “And we do not  take percentages.”

The chairman of the board of the organization was a successful real estate developer, an industry where commissions are common forms of compensation, so he paid it without question, only to learn too late that the fundraiser had acted unethically.

“There are people like that out there,” she says.

When mistakes are made, Grace points out, transparency becomes paramount.

She cited an example from years ago where the leader of a faith-based social services organization spent money in unauthorized ways. The new executive director met with every donor and explained what happened and what procedures were being put in place to ensure it never happened again. The director then offered to return their money. Only one donor asked to get the money back.

“That kind of transparency is what people are looking for,” Grace says. “Most people will forgive us if we just tell them the truth.”

“A living document would reflect the values of the industry and push the field forward. It needs to be nimble to reflect changing landscapes, and it should be rooted in the idea of diversity, equity and inclusion, and accessibility.”

—Dana Patterson, one of AFP’s 2022 Outstanding Young Professionals

“A living document would reflect the values of the industry and push the field forward. It needs to be nimble to reflect changing landscapes, and it should be rooted in the idea of diversity, equity and inclusion, and accessibility.” —Dana Patterson, one of AFP’s 2022 Outstanding  Young Professionals
Dana Patterson, one of AFP’s 2022 Outstanding Young Professionals

Mitchell-Antoine cautions that the lessons learned must be fully integrated into new policies.

“You need to talk about the lessons with your team but also with the donor, so they can be assured that this will not happen again to them or to any other donor,” she says.

Other Donor Issues

Ethical fundraisers also must ensure that they are not manipulating a donor or taking advantage of them. Grace cites examples where organizations might send numerous letters to people who are elderly and who continue to donate, having forgotten about the previous solicitations. For wealthy donors who are giving a lot of money, it is important to include the donor’s advisers, such as attorneys and accountants, in the conversations.

“Don’t get people to sign things that they don’t know they are signing,” Grace says.

Mitchell-Antoine recalls two examples of where donor intent became important. In one case, she had to work with family members of a deceased donor who were unhappy with a will that left money to Planned Parenthood. The family filed a lawsuit that named Mitchell-Antoine personally. Because there was no prior relationship with this donor—no donations, no one able to corroborate the donor’s intention and the person was not known by anyone associated with the organization—she made the decision to relinquish the bequest.

“We are representatives for the donors. If I know the donors’ intent, I can argue that position,” she says. “I didn’t know this donor and could not say what the donor’s intent and wishes were.”

In another case, however, there was a clear understanding of the donor’s intent, where everything was in writing and she knew the person, so, despite objections from the heirs, the gift was honored.

Then there is the issue of having conversations around accepting donations from individuals or corporations that don’t align with the charity’s values or principles, such as a cancer organization accepting money from a tobacco company.

The Human Touch

Danisha Bhaloo-Shivji, CFRE, who has been involved with fundraising for about 13 years, and others say such dilemmas can be common. Bhaloo-Shivji, who is based in Canada, says she has learned how to handle various situations through experience.

Danisha Bhaloo-Shivji , CFRE
Danisha Bhaloo-Shivji , CFRE

“When starting in the profession, there wasn’t much education or learning opportunities—you kind of just fell into the work, and your ethics or loyalty automatically went to the nonprofit or agency you worked for,” she says. “Since that time, I’ve learned that you also have a responsibility to the donor you work with in ensuring that you are also meeting their needs, even if it might not necessarily mean having their giving go to the organization you work for.”

She has seen firsthand how nonprofits can help people.

“I lived in poverty growing up and was a Little Sister with Big Brothers Big Sisters—it changed my life,” says Bhaloo-Shivji, who works as the development and communications manager for Boys & Girls Clubs Big Brothers Big Sisters of Edmonton. “And it provided me opportunities I wouldn’t otherwise have had. Now, I’m full circle, working for an agency that supported me and my family, and hopefully making a difference in the lives of other children and youth who may need extra support, too.”

Like other professions, she adds, philanthropy needs ethics and ethical behavior, especially because philanthropies “are asking individuals to give them time, talent, and financial gifts.”

“That’s very personal to so many, and we want to ensure we are protecting donors as well as the agencies—and sectors—we represent,” Bhaloo-Shivji says. “Ultimately, we need to live by our philanthropic values of giving to uplift our communities—and being ethical is a principle that aligns to the core of our work.”

Ethical fundraising should encompass several factors: Transparency, which is showing where the funds will go; honesty, which is the realistic perception of the world and its needs; and compassion and empathy, which means building relationships with other people, Bhaloo-Shivji says.

Pacheco says ethical fundraising requires an ability to look at the human connections.

“We could say that, with ethics, we intend to learn to critically reflect on the best way to build and live to achieve the best possible life for all. Fundraising should be a human activity that, with its specificities, achieves that goal,” Pacheco says. “Therefore, the main elements of ethical fundraising involve establishing a permanent reflection that responds to the context and shows the best ways to provide others with the opportunity to finance causes that seek to improve humanity’s quality of life. It will involve causes that seek to build a better life through actions. This exercise of critical reflection allows us to establish frameworks of action that give us references of how we can conduct ourselves and identifies those ways of being and doing: loving, transparent, honest, fair, inclusive, trustworthy, etc.”

Making the Code Better

One concern with the current code of ethics is that people might not be aware of what it entails, Grace says.

 “We all get it when we rejoin AFP and glance at it. But I doubt everyone reads it fully,” she says, adding that people should take the code seriously. She would advocate for sessions to be held annually in each AFP chapter where the reasons for the code can be discussed.

For now, Mitchell-Antoine sees the code-revision process as an “opportunity to recalibrate and refresh,” looking for ways to make it more accessible and more relevant to modern fundraising. If it is made easier to follow and understand, people won’t have to spend as much time trying to interpret it.

“A code of ethics shouldn’t read like the 10 commandments—that thou shall do this and shall not do that. A code of ethics should attempt to provide guidance for fundraising professionals to uphold best practices as it relates to their moral responsibility of holding a trusted position and serving as an ambassador for an organization, as well as donors. People need to feel like they can relate to it, or they will not use it,” Mitchell-Antoine says. “It should recognize the lived experience of the fundraiser. We want them to see this document as something that is useful to them, which is a different type of recalibration than what has been done in the past.”

Practical tips about how to ask for a gift and how to manage the various pieces of a fundraising program would be useful, too, she adds.

“We want fundraisers to be above reproach in practicing a profession that requires soft and hard skills,” she says. “They should have some sense of the right thing to do.”

Heinrich suggests that the updated code should be clearly written, so that organizations will be able to easily share it with stakeholders.

“Being proactive in understanding ethical fundraising is important because it really is key to everything we do,” he says.

The code also needs to have “teeth,” he adds. Membership in AFP demonstrates a commitment to excellence, partly because of the code of ethics, Heinrich and others say, so the public will appreciate knowing that ethical violations will have consequences, such as a loss of membership.

Grace would agree, noting that one issue she has faced is plagiarism, where several people have taken her materials and programs and passed them off as their own. One of these incidents was reported to AFP and was brought before the Ethics Committee. While everyone should know not to plagiarize, there should be repercussions when it occurs, which might discourage it from happening.

“I don’t think you can force ethics any more than you can force love. But I do think that when there are teeth in an ethics program, it does get people’s attention,” Grace says.

As a young professional, Patterson says, she also thinks that there needs to be room for people to learn from mistakes. “If you find out that you violated a code of ethics—because you weren’t aware of it or didn’t have a network to rely on—it might be easy to blame yourself,” she says. “You can use the experience to guide yourself to become a better fundraising professional. If you feel like you violated something, use it as a learning experience to improve and get better.”

Opportunity to Support Diversity

Several observers mention that the review of the code is an opportunity to assert commitments to diversity, equity, and inclusion.

For wealthy donors who are giving a lot of money, it is important to include the donor’s advisers, such as attorneys and accountants, in the conversations.

“Its best chance of continuing to be strengthened will be as more voices from different communities are included,” Pacheco says. “Certainly, many things that happen in the United States or Canada do not occur in the same way as they do in Mexico or Egypt. This means that the Mexican community can enrich AFP Global with their reflections, while also making the necessary adaptations to the code for their professional practice in their context. … Today, it is essential to include new perspectives on diversity, inclusion, equity, and accessibility that address very different challenges and contexts in other latitudes.”

Bhaloo-Shivji says the revised code should take into consideration the varied backgrounds of fundraisers.

“Research should be done on how different cultures give so that we can ensure we capture as much as we can to make all feel welcome and comfortable and abiding by the code,” she says.

Patterson suggests that the code should be an organic document, which can evolve as situations change.

“A living document would reflect the values of the industry and push the field forward,” Patterson says. “It needs to be nimble to reflect changing landscapes, and it should be rooted in the idea of diversity, equity and inclusion, and accessibility.”

A strong code should be thought of as guidelines, rather than hard and fast rules, she adds. That approach will spark thoughtful conversations, which would lead to better understanding and acceptance of the underlying principles. It also would encourage smaller organizations that don’t have the resources to join AFP to stay engaged.

“I see it as an educational tool to strengthen the profession,” Patterson says. “It contains the collective wisdom of people who have been doing it for decades and who can share it with those who are coming in. We need to have conversations around it.”

Heinrich would like to see the code attempt to make specific steps to level the playing field for all fundraising professionals, ensuring that everyone is treated equitably and with the same level of respect. He says an example might be AFP’s initiative to create salary transparency in job postings to ensure equal pay for women.

Looking Ahead

The current code and the efforts to improve it will strengthen the profession, Heinrich and others say.

“I believe in the nonprofit sector deeply, and the ethics code really strengthens our sector,” Patterson says. “And a stronger fundraising sector means a stronger nonprofit sector, which means stronger and more resilient communities. The crux of that is ethics and trust.”

Those are some of the reasons that she highly values the concept of putting causes and communities ahead of herself.

“Putting the community’s goals ahead is a collaborative approach, and collaboration makes for stronger and more resilient communities compared to trying to do it on your own,” Patterson adds. “I think it all relates back to trust and the code of ethics.”

Mitchell-Antoine and Grace also suggest that the future should involve more collaboration among nonprofits, where competition for dollars becomes subordinate to the various goals in a community.

“Increasingly, we see examples of actions or words that serve to discredit the work others are doing because they are perceived as a threat,” Mitchell-Antoine says. “We can use the code of ethics as a guide on how to comport yourself as a professional.”

Grace suggests efforts at collaboration should be part of the reworked code and not focus solely on the ethical behavior of AFP members toward their clients and donors.

“We should also look at how we interact with each other as professionals. What is our integrity with each other? Do we collaborate? One of the highest levels of integrity is a willingness to collaborate, whether it is on a mission or whether with each other,” Grace says. “We have entirely too much competition in our sector—not only between organizations but also between professionals.”

“We have only one job to do—and that is to solve the problems of our world, which are plenty,” she continues. “As long as we compete with each other and exhaust resources and donors, we are not going to solve the problems. We need to get together and determine how we are going to solve these problems together. Whether it is education or cancer or homelessness or hunger or food security. How do we get together to do it? To me, that is the ethical issue of our profession and our time.”

Thomas A. Barstow Thomas A. Barstow is senior editor of Advancing Philanthropy.

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