50% of Nonprofit Leaders Have Witnessed Ethical Fund-Raising Lapses, Study Finds

More than half of nonprofit executives say they have observed unethical fund-raising behavior, a new survey has found. The most common concern raised by executives: use of percentage-based compensation to pay fund raisers.

The research, released today at the annual meeting of the Association of Fundraising Professionals, was conducted by the Giving Institute, a Glenview, Ill., organization that represents fund-raising consulting firms. The institute surveyed nearly 450 nonprofit executives in charitable organizations of all types; a majority of those surveyed said they had at least 20 years of experience at nonprofit organizations.

While the Association of Fundraising Professionals and other organizations have long banned commissions as part of their ethics codes, the practice appears to be alive and well according to the nonprofit executives in the survey. Fund raisers who oppose commissions say they worry that donors will think they are being asked to give more to benefit the fund raiser rather than the charitable cause.

A wide range of other ethical lapses were reported, including backdating donations to enable donors to take a tax deduction in the year before their gifts were actually made, accepting personal gifts from donors, using contributions in ways other than donors had been promised, and persuading donors to make gifts that they could not afford.

More than 90 percent of those surveyed said that nonprofit executives, volunteers, and donors need more education about what constitutes ethical fund raising. Meanwhile, a majority, 83 percent, said that news-media reports of unethical fund-raising practices have damaged the fund-raising profession.

A full copy of the survey will be available at the organization’s Web site