Yet more on percentage-based fundraising - AFP ups the ante

Just other day I posted an email exchange I had in which my correspondent argued that, contrary to what AFP (Association of Professional Fundraisers) and others may say, there are times when when contingency or percentage-based fundraising fees may actually be more ethical than flat fee or hourly rates. The argument was essentially that small organizations (indeed, most any nonprofit) can ill afford to pay up front for grant writing or other fundraising services that may or may not result in donations or grants to the organization. The impact of such charging, according to my anonymous letter writer, was detrimental to the sector.

Well, now the AFP has upped the ante in this ongoing discussion, by trying to raise it from being an ethical question, to being a legal one. AFP has now renewed it's call on Congress to officially ban the practice of all percentage-fee based fundraising. This comes on the heals of AFP conducting a survey in which they found that the organizations with the highest fundraising costs were those that paid their fundraisers by percentage.

According to Paulette V. Maehara, CFRE, CAE, president and CEO of AFP:

These are causes that are near and dear to the hearts of all Americans, but the public's generosity is being abused. Congress needs to act to ban percentage-based fundraising so that the public can rest assured that charities and their fundraising firms are putting the needs of donors first.

Now, let me reiterate, that I have always followed the AFP code, and have never charged a contingency fee for grant writing or any other services. But let's take a look at the last few words of that paragraph: "... [put] the needs of donors first.".

Donors first, eh? Not the sustainability of the nonprofit organizations that don't have the cash-flow to pay upfront for fundraising with no guarantee of success? Not ... oh, I don't know ... the clients and communities served by the nonprofit sector?

Again, I still believe that a set fee for services is the proper way to go in most situations, but more and more I'm convinced that a compromise can be reached where nonprofits are not bankrupted by fundraising costs, and contingency fees, with set caps, may be used that meet the needs of everybody involved.

And I also firmly believe that it's about time that donors put the needs of nonprofits ahead of their own.

Fundraising Mistakes That Bedevil Boards

At today's monthly meeting of the AFP Silicon Valley (Association of Fundraising Professionals), the guest speaker was Kay Sprinkel Grace on the topic of Fundraising Mistakes That Bedevil All Boards (And Staff Too). Kay is always a wonderful presenter, and this topic - based on her book of the same title - was particularly well received.

The mistakes that Kay identifies, or in some cases popular myths, include:

• People will give just because yours is a good cause,
• Donors are drawn to organizations in need,
• People dislike giving
• "We can't raise big money, we don't know any rich people,"
• Volunteers don't have to give in order to ask others to give - their time is their gift, and
• It is impolite to ask for specific amount.

Kay diffuses each of these myths with anecdotes and humor and shows us to avoid - or remedy - them in our fundraising practice.

Another important mistake for professional nonprofit fundraisers is to ever believe that our education is complete. I always enjoy AFP luncheons, and always learn something. Even when it's a bit of a refresher, it's good to be reminded of some basics and maybe hear it in a different way.

You can learn more about Kay Sprinkel Grace at Transforming Philanthropy (.org) and find her "mistakes" book on Amazon.com