The first tenet of the Donor’s Bill of Rights:
“…to be informed of the organization’s mission,
of the way an organization intends to use
donated resources, and of its capacity to
use donations effectively for their
intended purposes.”

(other tenets here…)

Henry “Hank” Rosso was a key figure in the development of philanthropy in America. Founder of the Fund Raising School at Indiana University, he was instrumental in the advancement of ethical fundraising practices. As he pointed out in his now-famous introductory chapter to Achieving Excellence in Fundraising (now in its 4th edition),

Each organization that uses the privilege of soliciting for gifts should be prepared to respond to many questions, perhaps unasked and yet implicit in the prospect’s mind. These may be characterized as such: “Why do you exist?” “What is distinctive about you?” “Why do you feel that you merit this support?” “What is it that you want to accomplish and how do you intend to go about doing it?”, and “How will you hold yourself accountable?”

These are the big questions, and they speak directly to the substance of an organization’s mission. Rosso wrote and spoke at length about the importance of mission in fundraising. The mission is what ultimately legitimizes the solicitation process. Without a worthy cause, both the donor and the solicitor are demeaned. As he put it,

Fundraising is values based; values must guide the process. Fundraising must never be undertaken simply to raise funds, it must serve the large cause

How fitting, then, that the Donor’s Bill of Rights begins with the maxim that donors have the right to be well-informed about an organization’s mission.

Elsewhere, I have written about the fourth tenet in the Donor Bill of Rights, which is concerned with honoring donor intent. This first tenet also refers to donor intent insofar as it speaks to the need to inform donors of how their gifts will be used. There is, however, a subtle nuance to the wording. Where the fourth tenet more or less assumes that the donor has stated an intent, the language here speaks more to the organization’s need to communicate its own intent, especially with regard to the use of unrestricted gifts.

It puts the onus on the organization to communicate deliberately with donors about what it does with unrestricted gifts. In other words, the organization has an obligation to tell donors what they will do with the money, whether the donor asks or not. Often this can be handled in the appeal itself, by stating that gifts to fund “X” make it possible to place funds where there is the most need at any given moment. On the back-end, the organization has a responsibility to show the impact of gifts so that the donor knows, at least in general terms, how his or her money was used.

The third phrase in this first tenet raises another issue. Donors have the right to know, and organizations have a responsibility to disclose honestly, whether they are even capable of using the money in the most effective way. This has become increasingly important, as the number of 501(c)3 entities has increased dramatically, many of which are in competition with each other.

Take cancer research for example. The American Cancer Society is one of the largest cancer research supporters in America, and it has labored over time to build relationships with universities and institutes to fund their research. They are “in the business,” as it were, and they know their way around.

Now consider a hypothetical small family foundation that was recently established in the wake of a family member’s death due to cancer. The family is grieving, and in an effort to make something meaningful out of their grief they have established a foundation to aid cancer research. They do not have the relationships that ACS has, nor are they as well positioned to fund cancer research, but they want to help nonetheless.

Does this mean they should not seek donations, because they are not as well established as ACS?  Not necessarily. The Susan G. Komen Foundation began in a similar way, and it has emerged as major player in the fight against breast cancer. What is important for charitable organizations, be they fledgling startups or time-tested institutions, is that they be honest with donors about where they are in their journey, what they are capable of doing with donations, and what they are not yet capable of, leaving it to the donor to make a prudential judgement as to whether the organization is worth supporting at this time.

That can be hard, because it requires organizations to be honest with themselves about their capabilities, but donors deserve to know the truth about how well positioned their money will be to make a difference should they decide to give.

Question: What do think is the best way for an organization to communicate its capabilities with prospective donors?

Posted by Mark Zobel, Ph.D., C.F.R.M.

Executive Director for Philanthropy and Stewardship, and Adjunct Professor of Philanthropy at Blackburn College in Carlinville, Illinois

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