Why do bad things happen to good charities? In the
fundraising arena, undue influence, poor judgement and lack of courage all play
a role-and that's just for starters, according to Eli Jordfald
They presented a teasingly-titled session, "Shredded Files,
and Beach Homes, and Red Corvettes...Oh My!" at April's international
conference of the Association of
in Vancouver. The stories, all true, went from
bad to worse. But for every ethical lapse, the duo offered the guidance of
written codes, the standard of personal vs. public gain, and the compelling
question, "Would you want your mother to read this in the newspaper?"
Grey, black and blue
Suppose you are the CEO of a domestic violence centre, and
the board chair's wife discloses to you that her husband is abusive. She offers
to show police reports as proof. What should you do?
a meeting of key board members to discuss the potential crisis?
the chair without revealing your information source and urge him to resign?
the matter in confidence and take action?
The real CEO first confirmed the information by checking
with the police. Then she called the meeting (1), and those board members
confronted the chair (2). Here, said Mitchell-Antoine, the issues included the
conflict between the chair's behaviour and the organization's mission; his
conflict of interest as a perpetrator of the illegal behaviour that the charity
seeks to end; and the need to comply with laws.
Red Corvette nightmare
In this case, the much-loved and phenomenally successful
president of a public university suggested a red Corvette when he was asked
what he wanted as a retirement gift. And he was serious!
The development VP recommended that the governors get the
car. After the board chipped in, the funds flowed through the university foundation,
which issued a tax receipt to everyone who wrote a cheque.
At the dealership, the VP purchased the car with a cheque
issued by the foundation and had her picture taken behind the wheel. When local
media broke the story, the board denied knowledge of the purchase.
The crisis escalated. School officials locked the
fundraising staff out of their offices. Police seized the foundation's records
and arrested the development VP. Gifts plummeted after photos of the arrest
accompanied the story through an ever-widening media circuit.
"My ethics barometer is off the charts here,"
Mitchell-Antoine stated. "It violates many principles of AFP's ethical code, starting
with conflict of interest, offering compensation without taxation and using
donors' resources without clear documentation."
And whatever a reasonable retirement gift looks like, she
added, it's clearly not a Corvette!
Ultimate gift of
"Jane," development head for a veterinary college and single
mother of an autistic son, developed a long personal relationship with "Minnie,"
a wealthy farm widow who gave generously to the college through the decades. When
Minnie died, she left a good deal of money to the college and even more to Jane.
What should Jane do? Assume she didn't know about the gift
in advance and hadn't influenced it, and that Minnie was competent.
Both presenters agreed that Jane's professional role takes
precedence over their personal relationship. Mitchell-Antoine pointed out that
the AFP the code doesn't have a clear answer for such situations. Nevertheless,
the college president and the board chair told Jane she was violating the code
and asked her to turn her bequest over to the college. Instead, Jane kept her
bequest and resigned.
Attendees agreed with Jordfald that the best solution was
for Jane to return her bequest and let the estate trustee make an independent decision
about allocating the funds. Mitchell-Antoine pointed out the need to be very
careful even about small, personal gifts from donors, because they add up over
In this case study, a wealthy, well-known man made a gift and
demanded to remain anonymous even from the charity's CEO and board. The charity
had a sensitive mission in the mental health field, so the donor may have had
good reason to demand confidentiality. But the CEO demanded to know the name,
citing her fiduciary responsibility.
Jordfald explained that nondisclosure provisions usually
apply to unauthorized persons, not to other officials in the charity. Information
created by the organization belongs to the organization, she said. The
development officer was obliged to explain that the donor's name would have to be
available to a limited number of the charity's officials.
However, the development officer took her confidentiality
pledge to the point of shredding the files when she moved on. In a misguided
attempt to maintain the donor's anonymity, she committed a much worse ethical
breach by destroying her employer's property.
Suppose that you arrange a multi-million-dollar pledge in
return for naming rights to a university library. Everybody's thrilled. In
gratitude, the donor offers you the use of his beach home for a week. What
would you do?
Mitchell-Antoine was uneasy with this case. She cited the
portion of the AFP ethical code forbidding the exploitation of a relationship
for personal, rather than institutional gain. If you did accept, she warned,
think about how you would handle the media's discovery of your holiday.
Jordfald pointed out another stipulation in the code that required the
fundraiser to declare the gift as taxable income.
Would it be different if you and your spouse stayed for a
week while the donor and spouse were there as well? The audience response
varied. "It's good for cultivation." "Absolutely not! What if the donor dies
and leaves more money to the university? The family could accuse the fundraiser
of undue influence because of the time they spent together."
"How is going out to coffee or to dinner with a donor
different?" one participant wanted to know. After all, that, too, is part of
building a relationship. For Jordfald, the fundraiser's ability to reciprocate
makes all the difference. Most fundraisers can return a dinner out, but they can
not offer holiday accommodation for a week.
Clearly, said the presenters, the lines between friendship and
cultivation will blur if you work with the same individual for 15 or 20 years. For
Jordfald, the guiding principle is simple: "If it doesn't feel right to you
somehow, you shouldn't do it."
Joyce Mitchell-Antoine is development VP at Planned Parenthood Health Systems of
Raleigh-Durham, North Carolina. Eli
Jordfald is senior major gifts director at the University of North Carolina Chapel Hill.