	Ethical Practice

Introduction

Administration and Management

Service Delivery Administration Standards

Service Standards

ETH 3: Fundraising

An organization that raises funds by individual solicitation from the general public conducts fundraising activities in an ethical, fiscally responsible manner.

Update: Revised Interpretation - 12/01/10

ETH 3 Original Interpretation:

This section is applicable to organizations that solicit or receive money from private individuals, through capital campaigns, contribution plans, and United Way appeals. This section is not applicable to organizations that apply for and/or receive private or public grants and contracts.

Interpretation: This section is applicable to organizations that solicit or receive money from private individuals, through capital campaigns and contribution plans. This section is not applicable to organizations that apply for and/or receive private or public grants and contracts.

Note: The organization reconciles its fundraising practices with prevailing ethical practices of the Association of Fundraising Professionals or similar national bodies.

NA The organization does not conduct fundraising.

ETH 3.01

The organization’s governing body and management oversee fundraising activities and establish written agreements with outside contractors or consultants.

Update: Deleted Interpretation - 05/01/11

ETH 3.01 Original Interpretation:

Internal controls should address the handling and acknowledgement of contributions and respect for donor confidentiality requests. At a minimum, the organization should protect the confidentiality of donors who request anonymity by ensuring that such donors’ names are not published or listed in newsletters, articles, annual reports, or other publicly available documents regarding the organization.

ETH 3.02

The organization:

accurately describes the purpose for which solicitations are being made;
spends funds for the purposes they were solicited, with the exception of reasonable costs for administration of the fundraising program;
maintains accounting segregation for restricted funds; and
respects donor confidentiality requests.

Update: Revised Standard, Added Second Interpretation - 05/01/11

ETH 3.02 Original Standard:

The organization:

accurately describes the purpose for which solicitations are being made;
spends funds for the purposes they were solicited, with the exception of reasonable costs for administration of the fundraising program; and
maintains accounting segregation for restricted funds.

Interpretation: Conducting solicitations in an ethical manner also requires the organization to ensure that there are no material omissions, misstatements of fact, or misrepresentation regarding the use of funds.

Interpretation: Internal controls should address the handling and acknowledgement of contributions and respect for donor confidentiality requests. At a minimum, the organization should protect the confidentiality of donors who request anonymity by ensuring that such donors’ names are not published or listed in newsletters, articles, annual reports, or other publicly available documents regarding the organization.

ETH 3.03

Costs and benefits of each fundraising activity are analyzed, taking into account factors that affect the reasonableness of fundraising costs in comparison to dollars raised.

Interpretation: Factors that affect reasonableness of fundraising costs to dollars raised include, and are not limited to: the differential costs of donor solicitation, donor renewal, large bequests, or donations that would obscure true fundraising costs. The organization must show that it carefully allocates fundraising costs and does not obscure them by allocation to program or educational purposes. The organization must collect and maintain data that support sound fund-development decisions by its leadership.

ETH 3.04

Upon request of a donor or funding source, the organization discloses descriptive and financial information for revenue-generating activities including fee-for-service programs, for-profit subsidiaries, and related or unrelated business ventures.

ETH 3.05

The organization raises funds in accordance with applicable local, state, and federal requirements and registers all fundraising activities with the appropriate administrative authorities.

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	PURPOSE: The organization earns and sustains the public trust through honest, truthful, and responsible transactions, partnerships, and relationships with individuals, communities, providers, businesses, donors, and government entities.

RELATED FILES


	CONTRACT A formal written agreement between two or more parties that specifies the services, space, or products to be provided in exchange for some form of compensation. Also known as "purchase of service arrangement."


	PRACTICE Established actions or ways of proceeding in the regular performance of organizational duties. Policies and procedures often guide practice.


	GOVERNING BODY A person or persons with the legal authority and responsibility to set policy and oversee the operations of an organization. Generally, the governing body is a group, such as a board of directors or board of trustees. While the exact responsibilities of the governing body depend on the nature and character of the organization, the governing body has minimum fiduciary responsibilities to the organization set by statute, regulation, and case law, and typically assume responsibilities for long term planning, risk management, and evaluation and effectiveness of management.


	CONSULTANT A person who provides specialized or technical advice or services to an organization for specific purposes on a contractual or fee basis, or who provides such services as a volunteer with an agreement to provide services on a pro bono basis.


	PROGRAM A system of services offered by an organization. For example, an organization providing a mental health service may offer several mental health programs to different populations, e.g., a mental health program for adolescent teens. The word "program" can be used interchangeably with the word "service" or to describe specific programs.


	LEADERSHIP A nonprofit organization's leadership consists of its governing body, chief executive officer, and may also include its senior management. In a public agency the term refers to the agency head and administration team. The term "leadership" is not generally applied to for-profit organizations. With respect to COA standards, in for-profit organizations the term leadership applies to the owner and board of directors if one exists.


	SERVICE One or more organization-operated programs or activities that have a common general objective and deploy the organization's material and human resources in a planned and systematic manner. An organization that publicly promotes or identifies itself in writing as offering a service, is licensed to deliver a service, assigns personnel and/or space to a service, or allocates financial resources to a service is considered to offer that service.


	MANAGEMENT See ADMINISTRATION