Ethical Standard Deep Dive: Standard 2

Throughout the month of October, members of the AFP Ethics Committee will be addressing each of the standards in our Code of Ethics. Today is Standard 2 with comments by Tycely Williams, CFRE.

< See All Ethical Standard Deep Dives

Standard 2: Members shall not engage in activities that conflict with their fiduciary, ethical and legal obligations to their organizations, clients or profession.

Tycely: As ethical fundraising professionals, we must at all times uphold public trust, provide transparency and understand how best to detect, disclose, and at times disengage due to conflicts of interest.  I feel the standard that “members shall not engage in activities that conflict with their fiduciary, ethical and legal obligations to their organizations, clients or profession” is extremely important and often misconstrued.

When I first joined AFP in 2006, I vividly recall reading the second standard and concluding the general sentiment of this responsibility rested with individuals serving in a formal governance role. My perspective soon shifted. A software company that was launching a new fundraising product asked if I would devote time to test and provide feedback on the product’s functionality. Like most fundraising practitioners, I wanted access to products that would enable me and others to raise dollars more effectively and efficiently—so without hesitation, I agreed. The company representative thanked me and shared that in exchange for my time, I would receive a stipend.

The introduction of compensation, while well-intended, gave me pause. I knew acceptance of the stipend wasn’t illegal, but I questioned if it was ethical. I turned to the Code of Ethical Standards to help influence my decision making. I realized I needed to segment out the term “activities” to better understand the “action” causing my discomfort.

Through reflection, I concluded the act of participating in the beta test did not conflict with my fiduciary, ethical or legal obligations to my employer or our profession. However, the act of being compensated to participate in the beta test could be interpreted as an offense against my obligations. I was responsible for administering a departmental budget and fairly identifying vendors, including software companies, through formal bidding processes. I questioned if I accepted compensation from this company, would I be able to fairly assess the capabilities of their competitors or further, be brutally honest about the product?

In this situation, I realized acceptance of the compensation would make it difficult for me to remain impartial. I owed it to my employer and future employers to eliminate what could have grown into favoritism and to avoid what could have been interpreted as unethical.

Guidelines

• Members shall take care to assure that all legally binding gift planning obligations they propose are prepared or approved by qualified legal counsel.
• Members shall urge their clients to seek independent, qualified counsel in regard to any legal or fiduciary obligation that a member proposes.
• Members shall make every reasonable effort to assure that their organization’s fiduciary obligations are held to the highest ethical standards and conform to applicable law.
• Members shall make every reasonable effort to assure that third party organizations that are appointed to carry out fiduciary obligations on behalf of their organization are held to the highest ethical standards.

Examples of Ethical Behavior

1. Knowing and, if necessary, informing organizational leadership and/or organizational clients of applicable ethical and legal fiduciary practices.
2. Being prepared to inform appropriate organizational leadership of any illegal practices in which their organization may be participating.
3. Developing internal contribution acceptance and stewardship policies that address the legal and fiduciary obligations of member’s organization.

Examples of Unethical Behavior

1. Failing to seek legal counsel in the drafting of legal contracts (e.g., pledge, endowment, sponsorship, or gift annuity agreements) that are proposed to others.
2. Failing to urge others to seek independent legal and/or professional tax counsel in regard to planned giving arrangements.
3. Ignoring known illegal practices of the member’s organization.
4. Encouraging others to engage in unethical or illegal transactions.

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