Nonprofit organizations play an important societal role in serving as the vehicle by which philanthropy occurs. Nonprofits act as the intermediary between donors and beneficiaries and have ethical and legal obligations to ensure proper handling of funds to carry out their missions. Nonprofit fundraising should be conducted according to the highest ethical standards with regard to solicitation, acceptance, recording, reporting and use of funds. Nonprofits should adopt clear policies for fundraising activities to ensure both responsible use of funds for designated purposes and open, transparent communication with donors and other constituents.
Ethics, Responsibilities, and Policies
1. A nonprofit’s board and its executive leaders should be familiar with the Association of Fundraising Professionals’ Code of Ethical Principles and Standards of Professional Practice, available at www.afpnet.org and, through adequate management and supervision, should ensure that all fundraising professionals acting on behalf of the organization adhere to these principles and standards.
2. To foster and maintain the public’s trust, a nonprofit should seek only the funds it needs to reasonably work toward achieving its mission over the foreseeable future. When appropriate, reserve accounts and endowments should be established for the purpose of supporting the financial sustainability of programs.
3. A nonprofit must honor the donor’s intent to the extent that it is compatible with and contributes to fulfilling the organization’s mission. If a gift cannot be so characterized or if accepting it will create problems for the organization or its constituents, then the nonprofit must respectfully decline the gift.
4. According to their means, board members should make personal financial contributions to the nonprofits they serve. In addition, board members should engage in activities that raise funds from external sources.
5. Fundraising communications should include clear, accurate, and honest information about the organization, its activities, and the intended use of funds. Solicitation materials and other communications with donors and the public must clearly identify the organization.
6. A nonprofit must comply with laws concerning Do-Not-Call Lists. MT
7. A nonprofit should have policies that govern the receipt, management, and disposal of charitable gifts and grants.
8. A nonprofit must comply with disclosure laws regarding quid pro quo contributions when a donor receives something of value in return for a contribution. US
9. A nonprofit must comply with laws concerning fundraising raffles or other games of chance. MT, US
10. A nonprofit must comply with all charitable solicitation laws (including registration if applicable) when soliciting funds from donors in other states. MULTI-STATE LAW
11. Compensation for fundraising personnel and consultants should not be based on a percentage of funds raised or on other commission-based formulas.
Accountability to Donors
12. A nonprofit should publicly recognize charitable contributions and, at the same time, be mindful of maintaining donor confidentiality when needed. Nonprofits must not share or trade donor information with others unless the donor gives express permission to do so.
13. A nonprofit should practice good donor stewardship. A nonprofit should regularly communicate with donors regarding its activities and should make that information available by multiple means.
14. A nonprofit should have a written policy that governs stewardship of donors. This policy should address private and public acknowledgement of gifts and donor information, a threshold for the size of gifts to be recognized, and the sale and/or sharing of donor information.
15. A nonprofit should promptly acknowledge and thank donors and, in the process, assist donors in fulfilling their federal gift substantiation requirements. US
Accountability & Transparency ~ Public Policy & Advocacy
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