January 6, 2005 | Read Time: 2 minutes
The Association of Fundraising Professionals has revised its ethics code in an attempt to eliminate confusion over how fund raisers should be paid for attracting sponsorships, advertising, and similar types of support. The changes, which take effect this month, make it unethical for the association’s members to accept compensation based on a percentage of such revenue.
The association’s Code of Ethical Principles and Standards of Professional Practice has long prohibited fund raisers from accepting a percentage of charitable gifts they help obtain. The fund-raising group says the rule protects donors from fund raisers who might seek big contributions solely for their own personal financial gain. But until now, the organization’s code did not place an explicit ban on percentage-based pay for other types of revenue.
Growing Source of Revenue
As charities’ sponsorship, advertising, and marketing deals increased sharply in recent years, the association learned that some nonprofit organizations were paying fund raisers a salary for soliciting outright charitable gifts and adding on a percentage-based fee for sponsorship and other marketing revenue. A survey conducted in 2003 found that 1.5 percent of the association’s 26,000 members had accepted such percentage-based pay.
“The issue comes up for large development shops with many revenue streams, and some have had to get creative with compensation packages,” said Walter Sczudlo, general counsel of the association. But such practices, he said, could open fund raisers to criticism from donors and others who see little, if any, difference among revenue sources that support charities.
According to the 2003 survey, the vast majority of fund raisers — 88 percent of the association’s members — were paid a flat fee or salary for soliciting all types of revenue, even though two-thirds said they spent at least 25 percent of their time bringing in sponsorship and similar sources of support.
Members of the association who violate the code may be subject to disciplinary action, including expulsion from the association.
The ethics code is posted on the Association of Fundraising Professionals’ Web site at http://www.afpnet.org/content_documents/2002_AFP_Code_of_Ethics.pdf.
