Ethics in Fundraising

Accountability to Donors

Anonymous donors: Some donors ask that their gift remain anonymous, and are concerned that the nonprofit will sell their contact information to other nonprofits (which will increase the chance that they will be solicited by other nonprofits.)
- To address these concerns, the Association for Fundraising Professionals (AFP) has developed a Donors’ Bill of Rights that nonprofits are encouraged to adopt.
Acknowledging donations: Donors expect a ‘thank you’ note to acknowledge their charitable gifts. It is not only ethical to be transparent with donors about the receipt of their gifts, but it is also a legal requirement for certain gifts.
- Read the National Council of Nonprofit’s Fact Sheet on How to Thank Donors.
- IRS resources explain the rules that require nonprofits to acknowledge contributions/gifts.
- Review IRS Publication 1771, Charitable Contributions, Substantiation and Disclosure Requirements.
- Read about the IRS requirements for acknowledging “quid pro quo contributions” (gifts of $75 or more when the donor receives something of value in return.)
- Learn more from the National Council’s resources on fundraising.

Respecting a donor’s intent is an ethical issue and also a legal matter.
- A verbal agreement between a donor and a charity to use the gift in a certain way can be enforceable. When donors provide a contribution for a specific purpose this is referred to as a “restricted gift."
- Clarifying how a contribution will or will not be used, and respecting a donor’s intention about the use of a gift or how the donor will be recognized (such as a request to remain anonymous) is a basic tenet of ethical fundraising and accountability.
- Using a written agreement can help in defining how a gift will be used. Learn about Sample Gift Agreements.

The Association of Fundraising Professionals (AFP) has developed ethical standards for professional fundraisers.
- Read AFP’s frequently asked questions about fundraising ethics and
- Code of Ethical Principles and Standards for professional fundraisers.
“Can we pay our fundraiser a commission?” One frequently asked question about ethics and fundraising is whether it is appropriate for a nonprofit to compensate a fundraising professional based on a percentage of the money raised. The ethical code adopted by the AFP answers that question with an unequivocal ‘No’.
- See Standard #21 of the AFP Code of Ethical Principles and Standards for professional fundraisers.
- Read a position paper on percentage based compensation from AFP that describes why paying a fundraising consultant or grantwriter on commission or based on a percentage of funds raised is not ethical.
- Example: Code of Ethics/Fundraising. See Section VII of the Pennsylvania Association of Nonprofit Organizations' (PANO) Code of Ethics which is one standard contained in the Standards for Excellence for Pennsylvania nonprofits.

Fundraising activities should not only be ethical, but legal. Top legal considerations when engaging in fundraising are reviewed in this presentation, Raising Funds, not Eyebrows: Legal Considerations in Fundraising, courtesy of Venable, LLP.
Learn more: The Foundation Center offers a selected reading list of resources on Fundraising Ethics.

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