Campo de aplicación

A nonprofit is accountable to both donors & its constituencies for the mission it serves. (& to retain its 501c status.)

A nonprofit has an obligation to make solid business decisions to meet both short & long term objectives to make the world a better place.

DMANF Fundraising Principles

Donor expectation is high. They expect you to operate at angelic level of standards & transparency.

In fact—the degree to which a situation is ethical or not ethical is not determined by financial results.

DMANF Fundraising Principles

GENERAL PRINCIPLES:

a. Nonprofits must clearly articulate mission. b. Nonprofits must act to further mission.

c. Messaging to donors must be accurate and transparent. d. Nonprofits must apply good faith efforts to be compliant.

DMANF Fundraising Principles

Use of Funds/Cost of Fundraising

“Investing” v. spending (fundamental distinction)

Long View: Without donors and strategies to acquire and retain donors, nonprofits could not remain active and mission delivery would not survive.

DMANF Fundraising Principles

Fundraising is both a short term and a long term investment in the mission of an organization.

a. Costs are normal part of doing business

b. Investment takes years to pay off. Efficiency should be measured on overall program, not by a single campaign.

c. Restricted or unrestricted? Follow donor intent.

d. Diversify sources of funding & spend a majority of annual revenue on program.

DMANF Fundraising Principles

A nonprofit should spend a majority of its annual revenue on programming.

But if fundraising expenses exceed program expenses in a financial reporting period—explain why:

-start-up period

-new donor acquisition for longer term need -rebuild after period of cost-cutting

DMANF Fundraising Principles

Effectiveness is measured over time based on a combination of:

Mission, impact, financial stability & growth

DMANF Fundraising Principles

e. For accuracy on how contributions are used, nonprofits may allocate joint costs that include fundraising and/or to perform valuations of gifts in kind.

-reported on IRS Form 990

DMANF Fundraising Principles

Joint cost allocating:

Splitting up the cost of an activity when more than one purpose is served and the activity includes a fundraising appeal.

-example: a fundraising appeal that has a brochure detailing how to reduce cancer risks also includes a fundraising appeal. Gifts in Kind: valuation that accounts for goods donated to an organization.

DMANF Fundraising Principles

Honesty & accuracy in reporting joint cost valuations and gifts in kind valuations consistent with financial auditing standards & requirements.

-FASB, Financial Accounting Standards Board http://www.fasb.org/facts/

-Not-for-profit Advisory Committee (NAC) provides the nonprofit community perspective to FASB (est’d 2009)

DMANF Fundraising Principles

Working with Commercial Partners:

Contracting with external agencies, consultants and suppliers provides the most cost-effective means of accessing fundraising expertise.

You would not provide ongoing support to an organization lacking expertise run from a kitchen table! Public perception, though, seems to indicate a belief that organizations “should” run on a shoe-string budget using only volunteers.

DMANF Fundraising Principles

When you work with an agency or consultant:

-Get it in writing. If it seems to good to be true—it is.

-Document payments due, what the nonprofit is getting, the ownership rights in donor information and the materials to be produced for the campaign.

Remember that you need to control the contract—you should review it with your own counsel (& not counsel for the agency!)

DMANF Fundraising Principles

In a contract:

a. The nonprofit organization must always be in control of the program, message delivery, and the collection of funds. You will be blamed!

b. You should always be in control of and have immediate access to all donor names and contact information generated from the campaigns.

c. No conflicts of interest. Do not get entangled and know who really benefits. This can include Board, staff, vendors serving on boards—a “no no.”

DMANF Fundraising Principles

d. Payment schedule should be clear and “real.” A conflict occurs when proceeds of the campaign are tied to payment terms and the vendor is the beneficiary. For example— including a never-ending future interest in proceeds that cannot be paid back.

(The more you mail, the more you owe out of future proceeds v. actual payment for provided services.)

e. Understand contract terms before signing the agreement. Feel free to seek out other nonprofit fundraisers with seasoned experience to give you advice in addition to the legal advice by your counsel.

DMANF Fundraising Principles

f. A commercial entity partnering with a nonprofit organization should not knowingly or carelessly hurt or endanger the financial health or reputation of the organization. Being “savvy” or tricky is not ethical. Aiming a campaign at unsophisticated nonprofit supporters to help children, veterans, dogs, firefighters, the blind…and not actually providing promised aid could be fraud and is purely self- interested.

An agency working on behalf of nonprofits has an extra duty to be ethical!

DMANF Fundraising Principles

g. Be compliant with all federal, state filings required as a commercial partner.

Nonprofits should seek copies if they are not familiar with the agency or they have concerns and should also seek references from nonprofit clientele.

DMANF Fundraising Principles –