Ethics summer 2011

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Ethics summer 2011

  1. 1. Leigh N. Hersey, PhD<br />PADM 7642<br />Legal Requirements & Ethical Considerations of Fundraising<br />
  2. 2. Legal Requirements<br />
  3. 3. File to Fundraise<br />Register with the Department of State in order to solicit contributions directly or indirectly from, or within, the State of Tennessee.<br />Application for Registration <br />A Summary of Financial Activities <br />A copy of the organization’s IRS Form 990, form 990EZ, or Form 990N from its most recently completed fiscal year, if tax exempt. <br />An audited financial statement if the organization’s revenues, excluding grants received from government agencies and 501(c)(3)private foundations, exceeds $500,000 <br />Governing documents (Articles of Incorporation, if incorporated, by-laws, etc.) <br />$50, http://state.tn.us/sos/forms/ss-6001.pdf<br />http://www.multistatefiling.org/<br />
  4. 4. Other things to be familiar with<br />Be familiar with tax laws<br />Written disclosure<br />Deductible amount is limited<br />Provide good faith estimate<br />Written acknowledgement<br />Receipts for gifts over $250<br />Receipts for non-cash under $250<br />Form 990<br />
  5. 5. Considerations for Volunteers<br />Control<br />Confidentiality<br />Don’t replace paid employees with volunteers<br />Treat employees that volunteer as volunteers<br />Organizational liability for acts of volunteers<br />Liability for injury to volunteers<br />Vehicular responsibilities<br />Board members<br />
  6. 6. Ethics<br />
  7. 7. Relationships are built on Trust<br />Truth-telling<br />Promise-keeping<br />Accountability<br />Fairness<br />Fidelity (faithfulness)<br />Anderson, `96<br />
  8. 8. Areas of Trust<br />Donation will be used for its intended purpose.<br />Information will be kept private and confidential.<br />Fundraiser will not be swayed by conflicts of interest.<br />Organization will conduct ethical decision-making.<br />
  9. 9. Three-Step Process to Assess Your Ethical Position<br />The Stomach Test – How does your stomach feel after making this decision? If it feels upset, maybe it is not the ethical decison.<br />The Grandmother Test – Would you want to tell your grandmother what your decision was and why?<br />The 60-Minute Test – Sit on your decision before finalizing it. Do you still think it is a good decision?<br />
  10. 10. Potential Ethical Abuses #1Misusing Donor Funds<br />The misuse of contributions for purposes other than those to which donors assume they will go.<br />Using restricted building funds for operational expenses.<br />Investing funds in an endowment rather than purchasing equipment.<br />Using restricted contributions to pay for a consultant.<br />
  11. 11. Potential Ethical Abuses #2Divulging or Absconding with Donor/Prospect Information<br />Donor/Prospect lists and research data belong to the charitable organization, not to the fundraiser or researcher who produced or developed the information.<br />Taking donor lists or data when leaving one organization to join another.<br /> Selling donor lists.<br />
  12. 12. Potential Ethical Abuses #3Intruding on Private Affairs<br />Technology allows the development office to dramatically increase its ability to research the potential donor.<br />Obtaining an individual’s credit history.<br /> Above and beyond basic research.<br />
  13. 13. Potential Ethical Abuses #4Exploiting Relationships<br />Accepting personal gifts, favors, or benefits from donors you have cultivated for your organization.<br />Treating donors as a means to your own end.<br /> Encouraging donors to change loyalty when you move from one organization to another.<br /> Undue influence on estate planning decisions.<br />
  14. 14. Potential Ethical Abuses #5Negligent Security<br />How should donor/prospect information be handled by staff and volunteers?<br />Openly discussing prospective donors in a “rank and rate” meeting.<br />Leaving files and data where they can be easily copied or studied.<br />Leaving donor/prospect computer files open.<br />
  15. 15. Potential Ethical Abuses #6Questionable Charges or Expenses for Services<br />The nature of compensation for services is a controversial issue.<br />Percentage-based compensation.<br />Finder’s fees.<br />
  16. 16. Why not Percentage-Based Compensation?<br />The charitable mission can become secondary to the person gain.<br />Donor trust can be damaged by undue pressure to give.<br />The fundraiser may be tempted to influence the nature, size, and timing of a donor’s gift.<br />This type of compensation ignores the role of volunteers and other staff members involved in the process.<br />
  17. 17. Questions to Ask when Exploring Alternatives to an Ethical Dilemma<br />How does implementing a given alternative relate to the organization’s mission?<br />Does it relate to the organization’s mission? <br />Does it support the organizational mission? <br />How does it affect those who are the beneficiaries of the organization’s services?<br />How does a given alternative strengthen or weaken long-term relationships with colleagues (volunteers, donors, the broader community)? <br />How does a given alternative impact your own sense of personal integrity? <br />How does taking a certain course of action strengthen or weaken one’s personal integrity? Fischer, 2000<br />

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