Donor Control, Conflict of Interest and Tainted Money: Key Ethical Concerns for Fundraisers

Survey Finds Sexual Harassment and Workplace Issues Also Critical Issues

With the Association of Fundraising Professionals (AFP) celebrating October as Ethics Awareness Month, the association conducted an online survey of its members earlier in the year to assess members’ awareness of AFP ethical resources, potential changes to its Code of Ethical Principles and which ethical issues were of most concern to members.

The survey results show that long-standing issues such as donor control of gifts, conflict of interest and “tainted” money remain top ethical concerns for many fundraisers, but workplace issues, including sexual harassment and working with top executive staff, are important as well.

According to the survey, most members don’t have to address challenging ethical situations or dilemmas very often. Almost 50 percent of respondents said they typically face challenges or dilemmas once a year, while 23 percent reported they have never had to address such a situation, whereas close to 17 percent said roughly six times per year, and eight percent encountered challenges once a month. The survey did not specifically define what a “challenge” or “dilemma” was, so respondents may have different views of the situations they face.

When asked to rate their preparedness on a scale of 1 – 5 (with 5 meaning most prepared, 1 least prepared) when they were faced with an ethical challenge or dilemma, most fundraisers feel prepared, with respondents reporting an average rating of 3.96.

“Fundraisers practice ethics every day, and because they do—because they are able to keep their organizational fundraising programs running ethically and effectively—ethical challenges and controversies don’t arise very often,” said Mike Geiger, MBA, CPA, president and CEO of AFP. “But when they do, we want fundraisers to be prepared and knowledgeable in handling and addressing them, and that they can come to AFP for additional guidance and assistance. The survey shows fundraisers feel ready to respond to ethical challenges, but I think there are additional resources that AFP can provide to further assist them.”

From a list of common ethical challenges, respondents also identified ethical issues on which they need more guidance and resources. Donor control and restrictions on how gifts can be used was identified by almost half (48 percent) of respondents as a critical issue, followed by conflicts of interest (41 percent) and “tainted” money from donors (40 percent).

However, throughout the survey, several issues kept arising that members were interested in seeing AFP address through its Code of Ethics or through other means. These included sexual harassment, racial and gender bias, working with elderly donors, and online crowdfunding platforms.

Two other issues stood out. First, many members referenced the challenge of working with executive directors, staff, and boards who either may not fall under the AFP Code of Ethics or do not understand fundraising and associated ethical standards. Respondents asked for ideas and resources on how to approach these individuals, especially leaders and board members, to discuss ethical challenges.

Second, there were also comments that fundraising needs a code of ethics or behavior policy for donors. While documents such as AFP’s Code of Ethics and The Donor Bill of Rights explicitly state what donors should expect and receive during the stewardship and giving processes, there is nothing about the donor’s responsibilities. With enhanced scrutiny of donor behavior because of recent media stories (such as AFP’s recent harassment survey which found that nearly two-thirds of harassers were donors), many fundraisers believe that there should be guidelines for how donors—especially major donors—should behave with a fundraiser.

“The results of the survey show AFP needs to think more expansively about ethics in fundraising and the workplace,” said Martha Schumacher, CFRE, ACFRE, MInstF, chair of AFP. “The AFP Code of Ethics is focused, and rightly so, on fundraisers and their actions and behaviors. But we have to acknowledge that many people are involved in the fundraising and giving process. Ethical behavior and standards should apply to those individuals as well, and we need to support fundraisers as they work with colleagues, bosses, donors, volunteers and others.”

In addition, 59 percent of fundraisers believe that the U.S. and Canada should ask nonprofits about their adherence to the AFP Code of Ethics in their federal filing documents—the Form 990 in the U.S. and the Form T3010 in Canada.

“AFP is looking at how we can increase the awareness and usage of ethical standards in fundraising, and having governments check if charities are abiding by a code of ethics can be a critical way to do that,” said Robbe Healey, MBA, NHA, ACFRE, chair of AFP’s Ethics Committee. “We have not put together any sort of formal proposal or recommendation, but we wanted to gauge member interest and support for the idea.”

AFP is celebrating its first Ethics Awareness Month in October, using the month to highlight the ethical safeguards that nonprofit have in place and encouraging fundraisers and charities to abide by the highest ethical standards every day. Throughout October, AFP is offering a number of ethical resources and guides for use by members and non-members alike. More information on Ethics Awareness Month can be found at afpglobal.org/ethics.

AFP is going to use the results of the survey to guide its ethics education work in the coming years.

“Ethics has a core foundation of principles and values, but it’s never static, and this survey will help us add to and adjust our guidance and resources for members as society and fundraising change,” said Geiger. “As we celebrate Ethics Awareness Month in October—and all future Octobers—we are dedicated to helping fundraisers abide by the highest ethical standards in the profession by providing them the guidance and tools they need.”

AFP conducted the online survey in the summer, and 558 members responded.