How to Enhance Trust Using a Code of Ethics Powerpoint

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Enhancing Trust
Or…
How Not to Become One of
AFP Ethics & Accountability Workshop
2015 Collaborative Conference
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“Discipline is what you do when
no one else is looking.”
Jim Tressel, former Ohio
State football coach
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“The reputation of a thousand
years may be determined by the
conduct of one hour.”
Jim Tressel, former Ohio
State football coach
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Failure to Maintain Discipline
Has Dire Consequences
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Seven Ethical Dilemmas
1.
Tainted money
2.
Privacy
3.
Stewardship
4.
Honesty and full disclosure
5.
Conflicts of interest
6.
Appearance of impropriety
7.
Compensation
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Tainted Money
•
Conflict between an organization’s mission and
the source of contributed funds
•
Mission MUST be top-of-the-mind and must
NEVER be comprised
•
E.g., MADD wouldn’t accept money from a beer
company, but would a museum?
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Privacy
•
In an era where privacy concerns are heightened,
organizations must be methodical stewards of
personal information
•
Should neither obtain nor retain non-essential
and/or highly personal information
•
Information stays with the organization and
doesn’t go when a fundraiser changes jobs
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Stewardship
•
Nonprofits must assure the public that the funds
the organization raises are indeed being used for
the purposes for which they were given.
•
Nonprofits must honor the spirit as well as the
letter of donor intentions.
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Honesty and Full Disclosure
•
Nonprofits must give people enough information
to make informed giving decisions, not
"sugarcoat" their organizations' stories to make
them more attractive to a wider array of donors.
•
Honesty with donors is the essential foundation of
healthy benefactor relations.
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Conflict of Interest
•
Nonprofit organizations that "do business" with
members of their governing boards must ensure
that such transactions are completely transparent
and are subject to the same rules (e.g., bidding
process) as all other transactions.
•
Other areas with potential for concern include
fundraisers acting as executors for estates of their
benefactors.
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Appearance of Impropriety
•
There are many things that fundraisers can do
that are legal, but are unethical, such as a
fundraiser benefiting personally from a
benefactor's estate gift, bequest or outright gift.
The profession views such behavior negatively.
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Legal vs Ethical
It may be legal to be your donor’s executor.
But it is unethical to be your donor’s executor.
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Compensation
•
Compensation for fundraisers and fundraising
consultants should never be connected to the
amount of funds raised.
•
In the spirit of philanthropy, fundraisers are
motivated by advancing the mission of their
organizations, not by "earning" a percentage of
funds raised.
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Remember: It’s About Your
Reputation
• If a donor trusts you and believes
that you are ethical, you will
build loyalty and enhance your
fundraising effectiveness.
• If your professional colleagues
view you as ethical and
trustworthy, more doors may
open for your career.
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How Do We Really View Ethics?
1) Solely the role of the fundraiser
without an organizational context
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How Do We Really View Ethics?
2)
Often in a negative sense—only
brought up during a controversy
or scandal
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Why Don’t We Talk About
Ethics With Our Donors?
• Comfort level?
• Ruin a perfectly good donor
meeting?
• Remind supporters about past
controversies?
• Too many “do’s” and “don’ts?”
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Risk Factor 1: Public Concerns
• 70 percent of Americans say charities
waste a “great deal” or “fair amount” of
money.
• Only 10 percent says charities are “very
good” at spending their money wisely.
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We Might Not Be Comfortable
Talking About Ethics…
…But donors clearly are. And they’re worried!
100
90
80
70
60
50
40
30
20
10
0
2000
2008
Donor Confidence
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*Brookings Institution data
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Risk Factor 2: Regulation
Proposals Considered by federal and state governments







Establishing arbitrary fundraising cost ratios
Compensation caps
Limiting or eliminating the charitable deduction for noncash gifts
Limiting a charity’s board to between 3 and 15 members.
Mandating that the IRS audit each charity’s operations and practices
every 5 years justifying its tax-exempt status.
Requiring a charity to become accredited through some third party in
order to attain tax-exempt status.
Urging state enforcement of federal laws that likely would result in 50
different interpretations of federal tax rules.
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Risk Factor 3: Media
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Why SHOULD
We Talk About Ethics?
• Donors are DEMANDING it!
• How will donors know otherwise?
• Educate and fight misperceptions;
decisions not made in a vacuum
• Number one reason people don’t give
(when asked): They don’t TRUST the
nonprofit!
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What Donors Want
• Disclosure of what their donation
accomplishes
• To review the financial statements of
the nonprofit
• Independent audits
• Disclosure of staff compensation and
perks
* The Wealth Institute
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Communicating Ethics
• Explaining your ethical process and
safeguards in detail
• Relating a story about correcting an ethical
issue
• Discussing your board and its ethical training
• Providing ethics and accountability resources
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Ethics: Whose Job Is It?
The
Fundraiser
Other
Staff &
Volunteers
The Board
The Ethical
Organization
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The Board
• KNOWLEDGE
– Cannot act ethical without understanding of
fundraising ethics and challenges
– Many controversies arise not because of willful
wrongdoing but through ignorance
– Specific training must be given
– Differences between for-profit and nonprofit
boards
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The Board
• POLICY DICTATES PRACTICE
– Sufficiently high standards must be set from the
beginning—a code of ethics for the board
– No more coddling!
– Conflict of interest leads to many controversies—
set record straight early
– Determine WHY board members are serving
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Nonprofit Staff
• Tend to see fundraising and ethics as
removed from other nonprofit operations
• Are closest to programs
• Can make link from impact and efficiency to
ethics
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Educate All Staff
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Volunteers and Supporters
• Can be most powerful voice for ethics
• Are independent, yet authoritative opinions
on organization and ethics
• Share similar views, perceptions and
experiences
• Must understand organization fundraising
and ethical responsibilities
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AFP Ethics Tools
•
•
•
•
•
•
AFP Code and Donor Bill of Rights
AFP Code Guidelines
AFP Code FAQ’s
Enforcement Procedures
Position Papers and AFP Resource Center
Additional Resources:
– AFP Ethics Committee
– AFP’s President & CEO
– AFP’s General Counsel
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Failure to Maintain Discipline
Potential disciplinary actions
through the AFP enforcement
procedures:
1.
2.
3.
4.
Reprimand
Censure
Suspension
Revocation of AFP membership
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AFP Ethical Resources
• AFP Website (www.afpnet.org)
– Ethics section: Code of Ethics, A Donor Bill of
Rights, articles, position papers
– Member Gateway (log-in required): Resources for
chapter leaders, including ethics education chairs
– AFP Ethics Committee: For questions and
queries, contact the President’s office
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AFP Ethical Resources
Jason Lee
jlee@afpnet.org
703-684-0410
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