Recently, a panel of senior leaders discussed ethics and fundraising. A big part of ethics discussion included conversation about leadership in relations, relating, and relationships.
Ethics, fundraising, and staff turn-over
Fundraisers are ethical stewards who establish high levels of trust with donors and inspire support for their organization. The industry is a fluid one—the average tenure of a fundraiser ranges from 18 months to 4 years depending on which study you read. As leaders, it is important to understand how to ensure that donor relationships are honoured and stewarded in charity operations.
There is an important intersection between leadership, ethics, and relationships.
The connection among leadership, ethics and relationships means that donor relations involves much more than we might have imagined…donor retention can enhance the lifetime value of a donor by 200%, yet so often our business decisions favour new donor acquisition. This is exactly the point where leadership and relationships meet. Our behaviours as fundraising leaders should reinforce the importance of ethical governance in creating organization-wide systems aligned with our values and our reputation of trustworthiness to all organizational stakeholders. After all, donor relations and stewardship have fiduciary implications.
Hard questions for leaders
In fostering philanthropy comes an important responsibility
It is important to connect stewardship with ethics. It is easier to be more ethical when you fund stewardship to take care of appropriate stewardship. It is also worth noting that stewarding funds from government is very different from stewarding gifts from private donors. As part of the stewardship process, it's important to do a regular full agreement stewardship compliance audit. Making it right immediately has to be our mantra.
When the business of a charity changes, the board and the staff needs to change. New business lines require new Board members. When you change and diversify what the charity does, the skills of the Board needs to reflect and support that change. Ironically, if a charity CEO is too strong in fundraising and strategy, it can make it difficult for a charity Board to feel they have a purpose.
Despite more competition for the charitable dollar, have a consistent stance
A key to ethical behaviour is to be consistent. If you do things differently in each case, people don't know what to expect from you or your organization. Part of being consistent is to have the organization's values built into the staff performance evaluation. As one panelist noted "If I live my life with high integrity, that will come through in my work. We have to be prepared to say "no." You have to be prepared to stand up for the decisions you believe in. If I work consistently, then my staff knows what to expect of me and can determine how to act."
Board plays a key role
One panelist suggested that the annual evaluation of the organization include an annual donor evaluation with a donor experience score. As part of this process, this score is reported to the Board and CEO is held accountable.
Another panelist commented "I'm often on a Board, and I often recognize a donor prospect list from another table. That is an ethical problem so I won't look at lists." Another added that third party promoters can want to gain access to your donor lists. Key in making this decision is to determine if they are legitimate, have experience with other organizations, and their interest appears to be larger than self-interest.
A rising ethical concern is with donors who are starting to look at the Boards and say "I want a Board that looks like this City looks." This is particularly happening with women donors.
Donors and investments
A panelist noted, it is challenging to work with who can manage funds. It is particularly challenging when the donor is a wealth advisor who wants to continue to manage their own funds. They recommended developing a separate policy for this which includes accountability to the charity's investment policy. There is the donor's philanthropic role but there is also accountability back to the charity in investments.
One panelist (from a large charity) noted that "We have taken the decision to be absolutely pristine on CRA rules. CRA has recently beefed up their audit, and charities should feel they are on notice on that." Another panelist pointed out that 'There are a lot of small charities living on a shoestring where it is hard to staff properly for stewardship and comply with all CRA guidelines."
Relationships are key
The panel noted there is important leadership involved in cultivating, sustaining, and growing relationships. Part of this work includes embedding those relationships into the fabric of the organization in a way that is congruent with the organizations values.
Sharon Avery, President & CEO of the Toronto Foundation,
Helen Burstyn, C.M. Chair of Waterfront Toronto
Ted Garrard, C.M., CEO of the SickKids Foundation
Jo-Anne Ryan (Moderator), Vice President, Philanthropy and Executive Director TD Wealth and Private Giving Foundation
Remarks were summarized by Ann Rosenfield, MBA, CFRE who notes that any errors reflect her slow typing skills, not the wisdom of the panel.