The Fundraising Industry Responds to Congress’s Concerns

Stung by congressional criticism of practices that reflect poorly on its field, the Association of Fundraising Professionals is calling for legislation banning percentage-based fundraising, in which fundraisers receive a set percentage of every dollar successfully solicited. AFP’s Code of Ethics prohibits the practice and argues that nonprofits are mistaken if they think that consultants who engage in it are their only option:

Charities that pay for-profit fundraising firms through percentage-based fundraising often say that they do not have the resources to raise funds on their own and are receiving funds they otherwise would not normally receive. However, percentage-based fundraising is considered unethical because through its use:

• charitable mission becomes secondary to personal gain
• donor trust can be unalterably damaged
• there is incentive for self-dealing to prevail over donors’ best interests
• the very philanthropic values on which the voluntary sector is based are undermined.

[AFP president and CEO Paulette] Maehara also refutes the notion that percentage-based fundraising is the only alternative for organizations. “There are many ways you can structure a contract with a fundraising firm using a set fee or salary without percentage-based fundraising,” said Maehara. “I’m happy to talk with any charity that wishes to do so.”

The slightly libertarian streak in me would like to see the government get involved only as a last resort. That said, the industry’s move is a smart one. Dumping on veterans, which is what piqued Congress’s interest in the first place, is such a universally condemned misstep that ethical fundraisers had to act quickly to avoid being tarred with the same brush that is now deservedly smearing the industry’s more shady practitioners. | 501(c)