Monday, January 21, 2008

New column every Monday: "The Fundraising Guru"--Jan. 21, 2008

Fundraisers: You're being unethically bankrupt when you break your bank

by Dr. Stephen L. Goldstein

Way back when in Italy, financially sound bankers conducted their business from a banca, a table or bank. But when their business failed, their banca was rotta or physically broken to keep them from doing business.

Think of ethical fundraising as a 3-legged bank or stool.

The 1st leg is what's legal--and more. The 2nd is what's in the best interest of the donor. The 3rd leg is what's in the best interest of the nonprofit. You're ONLY acting ethically when ALL 3 legs are strong.

Leg 1:
At a minimum to be fundraising ethically, you must observe certain laws. But ethical conduct transcends simply what's legal. That's a cop-out. Laws are written with loopholes--sometimes intended, sometimes not. Ethical conduct has no loopholes. You can act fully WITHIN the law and be behaving unethically.

Leg 2:
Fundraisers' primary obligation is to a donor or potential donor.

It is unethical to raise money knowing that internal issues at your organization could compromise a gift. Fundraisers must demand that their organizations are squeaky clean. And nonprofits must be certain that fundraisers are keep fully informed about their internal workings.

Leg 3:
It is unethical to accept a gift ONLY to give a donor a tax benefit.

When a donor's tax or other benefit is greater/worth more than his contribution to the nonprofit, you are acting unethically to accept it.

It is illegal/ unethical for anyone associated with a nonprofit to personally benefit from a fundraising transaction--directly or indirectly.

Break one or more of fundraising's 3 legs and your conduct may not only be unethical: it may bankrupt your nonprofit.

Send your comments and questions to Dr. Stephen L. Goldstein at

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