Three times in the last month I’ve been asked this question by nonprofit board members and leaders: Can we bring on a fundraising consultant and pay him or her a percentage of what’s raised?
To someone in the business world, this results-based compensation approach may make sense. But in the world of fundraising, it’s highly unethical. As members of both the Association of Fundraising Professionals and the Giving Institute, The Curtis Group abides by the ethical standards of both organizations, as should every fundraising professional.
The Code of Ethics for the Giving Institute includes this statement: “Member firms charge clients based upon the professional services provided. Their fees are never based upon charitable gifts raised or a percentage of contributions.”
AFP also prohibits its members from accepting percentage-based compensation. Its position paper on this topic explains that anyone serving a nonprofit for compensation “must accept the principle that charitable purpose, not self-gain, is paramount. If this principle is violated and percentage-based compensation is accepted, charitable mission can become secondary to self-gain; donor trust can be unalterably damaged; and there is incentive for self-dealing to prevail over donors’ best interests.”
AFP also holds that percentage-based compensation can encourage abuses, as well as imperil the integrity of the voluntary sector and undermine the very philanthropic values on which the voluntary sector is based.
So now you know — if a fundraising professional ever proposes a percentage-based compensation agreement, think twice.