Acceptance of Funds Policy
The acceptance of funds with an easy conscience is all about preparation. Most fundraising organisations have evolved a set of guidelines for their fundraising operation. This will prevent its work being hindered and make it clear just what, and who, the organisation can accept from, before the asking is done. Doing this before you ask for funds saves an enormous amount of time and trouble later. Imagine your chagrin when your Executive Committee decides that a cheque for £50,000 from a major company must be returned, because a subsidiary of theirs in Ireland doesn’t allow unions in their factory.
The rationale behind most guidelines is to permit the maximum income acquisition possible, without undermining the mission of the organisation. Some organisations say they will accept any funds without strings attached to them, and if the funds come from those they work against, so much the better. However, you may like to consider that PR companies advise such businesses that setting up a large charitable fund is an effective way to influence the public and to let themselves be seen in a good light. Guidelines are, however, notoriously difficult to construct in such a way that fundraising is not inadvertently crippled.
A policy on accepting funds from companies may simply say, ‘We will accept no funds from any company which harms the environment’. This statement will then need extensive qualification to deal with the interlinking of companies through the structure of multi-nationals, the raw material supply and product delivery companies. The obvious questions are, ‘What exactly constitutes harm?’ and, ‘What about a company that is making great progress, should it be encouraged ?’ Faced with that sort of guideline, it is tempting to give up on companies altogether. Similar problems come from over-simplistic guidelines on the arms trade, tobacco companies and those who have links with impoverished countries or repressive governments.
Some organisations, like the Campaign Against the Arms Trade, can provide a detailed and lengthy blacklist. Any such list, covering a fair range of ethical issues in even a fairly straightforward way, will include most companies. It may appear easier to say who you could accept money from, if it were not for the fact that there are no perfect companies in this imperfect world. Some, however, are struggling to improve, and it can help to recognise this in the manner of many ethical investment trusts. Unfortunately, those that might appear on such a list today could disappear tomorrow, thus undermining the cast-iron list approach. Another, more flexible concept, is to say you will accept no funds from a source that would lower your organisation’s standing in the eyes of the public, and then let each case be judged on its merits by the recipient body of your organisation; which can raise any questions it may have to a higher level of your organisation for advice.
This is largely a question of empowerment and trust in the common sense of each separate part of your operation, (which for most organisations will simply be the head office). Until case histories have accrued, however, it may be sensible to mitigate such freedom with an approvals procedure for requests for donations over a certain level, and from any particular industry with which you are at odds.
Some organisations impose a percentage limit to prevent large donors from appearing to control the organisation. No more than ten percent of gross income is common, this is impractical for small organisations with a very low gross income – where will the first donation come from? This form of control also runs into problems when a capital appeal for, say, a new building, is contemplated. Here the early donations, which will be large, will often dwarf the normal gross income and the building may not succeed without those large donations. So, a method needs to exist whereby rules on acceptance of funds can be mitigated to suit the organisation’s real needs and objectives.
Other organisations say simply, ‘All funds are welcome but not earmarked for any specific project’. This is often found in large membership organisations where there are few funds from Trusts. If you wish to increase your Trust fundraising, this rule would be crippling, as Trusts like to sponsor discrete projects. It also raises another problem, in that membership organisations making frequent appeals for funds will cite different reasons for each appeal, and will need to make very clear to donors that their money is going into the general pot if that is indeed the case. Many organisations welcome donations for specific projects and deliberately carve up their work into such projects. This makes fundraising easier and brings the donors much closer to the work of the organisation, making repeat gifts more likely.
Acceptance of funds policy
So, what is to be done? Each organisation needs to take time to consider the questions cited above in the light of the overall framework of maximising income, without damaging the work it is doing. As a fundraiser, it is in your interest to draft an ‘Acceptance of Funds’ document, and ensure it passes through the relevant committees before you begin fundraising. Ask other organisations in your field for copies of their Code of Practice to help you, and to bring out all the issues for discussion, so that the debate does not occur year after year, as executive members think of new ethical issues to consider.
The Medical Foundation for the Care of Victims of Torture’s Fundraising Guidelines:
The guidelines for solicitation and acceptance of funds by the Medical Foundation are designed to enable its fundraising to be efficient and effective without compromising its objectives or bringing the organisation into disrepute with its supporters or the general public.
Decisions regarding the solicitation and acceptance of funds is delegated by the Trustees to the Director. The day-to-day administration of these guidelines is carried out by the Director of Fundraising.
1. The Medical Foundation will neither accept nor solicit funds from companies engaged in manufacturing instruments of torture or supplying such instruments.
2. The Medical Foundation will neither accept nor solicit funds from arms manufacturers where those arms have or could be used for repressive purposes or from companies supplying such equipment.
3. The Medical Foundation will not accept funds or solicit funds from companies where that association would lower or diminish its public and/or private support.
4. The Medical Foundation will not accept funds where the acceptance of such funds would cost the Foundation more than the intended donation; or where the receipt of such funds has conditions attached to it that are unduly onerous, costly or incompatible with its objectives; or where the Foundation has first to spend its own money to secure the donation and the assets of the charity would be under undue or inappropriate risk.
The Corporate Sponsorship Policy of the Westport/Weston YMCA, Westport, CT, USA
The Westport / Weston YMCA will seek and accept corporate sponsorship from organizations whose goals and activities are consistent with the mission. The mission states:
The Westport / Weston YMCA enriches the community by developing youth and strengthening families, while promoting healthy lifestyles for adults, emphasizing honesty, caring, respect and responsibility in its programs and services.
The Westport /Weston YMCA may:
Use sponsors’ names in event literature
Announce sponsorship during events
Inform members of sponsorship in member mailings
Display sponsors names within the YMCA and at YMCA events
Permit product display and distribution of sales materials at the YMCA and during YMCA events
The Westport / Weston YMCA will not:
Give out its membership list to sponsors
Promote or endorse specific products
Guarantee sponsors’ “good name”
The Westport / Weston YMCA will strive for consistency between sponsorships so that there is equity in what we provide and what sponsors provide.
With thanks to Cathy Onyemelukwe, Director of Development, Westport / Weston YMCA for posting this on the “Subscribers to fundraising” Internet discussion group.