New Guidelines Clarify Companies’ Responsibilities to Charity Clients

The Association of Fundraising Professionals, which represents more than 29,000 fund raisers, has released new ethical standards to govern the practices of businesses that provide fund-raising products and services to nonprofit groups.

The new standards spell out businesses’ responsibilities to their charity clients, such as maintaining the confidentiality of information on donors and other privileged information, and not offering clients payments as an incentive for choosing their products or services. The standards are designed to apply to fund-raising software companies, executive recruiters, telemarketing companies, consultants, and other businesses.

The association also requires companies to disclose to charities any arrangement in which they receive money from a third party that is derived by providing products or services to the nonprofit client.

Seven of the standards are new, while one other is a revision of a standard already in place. They will be added to the association’s Standards of Professional Practice.

In releasing its new standards, the association also announced that companies involved in fund raising will be allowed to join the association.

For annual dues of $5,000, companies will receive “Executive Circle” status, which gives them permission to use a specially designed logo stating that they agree to abide by the ethical standards. Those businesses also receive memberships for two corporate officials, who are eligible to serve on the association’s task forces and committees; discounts on exhibit space at the association’s annual meeting; and other benefits. For $1,500 annually, companies receive one membership and fewer benefits.

Paulette Maehara, president of the Association of Fundraising Professionals, said that neither the standards nor the corporate memberships were prompted by specific ethical abuses by companies serving charities. “They were developed because there are so many businesses coming into the field,” she said.

Ms. Maehara said that the association will encourage fund raisers to look for and hire companies that use its logo and have agreed to follow the new standards.

If corporate members do not follow the ethical rules, they will be subject to disciplinary procedures similar to those in effect for individual fund raisers. The association investigates complaints against members who do not follow its standards, and takes action to correct lapses, including revoking membership.

Following are the new ethical standards adopted by the Association of Fundraising Professionals:

• Members shall present and supply products or services honestly and without misrepresentation and will clearly identify the details of these products such as availability of the products or services, and other factors which may affect the suitability of the products or services for donors, clients, or nonprofit organizations.

• Members shall establish the nature and purpose of any contractual relationship at the outset and will be responsive and available to organizations and their employing organizations before, during, and after any sale of material and/or service. Members shall comply with all fair and reasonable obligations created by the contract.

• Members shall refrain from knowingly infringing the intellectual-property rights of other parties at all times. Members shall address and rectify any inadvertent infringement which may occur.

• Members shall protect the confidentiality of all privileged information relating to the provider/client relationships.

• Members shall refrain from any activity designed to disparage competitors untruthfully.

• Members shall neither offer nor accept payments or special considerations for the purpose of influencing the selection of products or services.

• Any member receiving funds on behalf of a donor or client must meet the legal requirements for their disbursement. Any interest or income earned on those funds should be fully disclosed.

• Any member shall not accept compensation or enter into a contract that is based on a percentage of contributions; nor shall a member accept finder’s fees or contingent fees. Business members should not receive compensation from third parties derived from products or services for a client without disclosing that third-party compensation to the client (for example, volume rebates from vendors to business members).