Keeping an Industry Scandal From Tarnishing Your Organization

I’ve been in the business for a long, long time (yes, my first boss was a dinosaur), and I’ve been unfortunate in that I have had to navigate through many scandals that have rocked our industry. I could mention a few names, and some of you would cringe right along with me. (But I’m not going to — that’s “shooting ourselves in the foot,” as far as I’m concerned.)
Let’s face it — some nonprofits are the worst enemies of the rest of us who are doing our best to stay above the fray and comply with the law and the “higher standard” some donors expect of us. But sadly, when a scandal hits the mainstream press, we feel it. Some donors assume “guilty by association.” Others use any excuse to say, “I told you so!” and cut back their giving.

We can’t “fix” the unethical (or legal but stupid) practices of the minority of nonprofits that are hogging the headlines, but we can make sure that their misdeeds have little or no impact on our missions — and our income (which impacts our ability to carry out those missions). Here are some proactive steps to take to minimize the “guilt by association” stigma.

Take a long, hard look around
Is there anything that could raise an eyebrow? Is your board peppered with staff and family members? Is your “independent auditor” your brother-in-law? Are your receipts slow to arrive and scant on information that assures the donor you are using the gift as requested? Do you have policies for gift acceptance that you consistently follow? Do you report back to your donors, not just ask them for money?

If you are in a position to address problems that surface, work with the appropriate people to make the changes that increase your donors’ confidence that you are above the taint of scandal and worthy of support.

Do some navel gazing
Are you ethical in your fundraising efforts? Are you careful not to skew information, exaggerate, use outdated information that is far more dramatic than today’s reality, tell donors what they want to hear instead of what is truth or reveal confidential information?

The Association of Fundraising Professional’s Code of Ethical Principles and Standards has to be signed annually when a member renews his or her membership. Whether you are a member or not, this is an important document to read and use as the basis of some soul-searching. The end does not justify the means, even if the “end” is more money for your great mission.

I once had a donor call and offer a substantial gift if I would guarantee that we would not take overhead out of it. It was tempting since the need was huge. But I knew that if we didn’t take overhead out of his major gift, every $15 and $25 gift would have to go 100 percent to cover the very real fact of overhead. After explaining to him that we could not accept his gift under those terms, he reconsidered and made his gift with the understanding that it was subject to overhead. That was a tough conversation — and ethical issues usually are. But at the end of the day, let’s be proud of our work and proud that we accomplished it while staying true to our ethical convictions — and our organizations’ standards.

If your employer is walking on the wrong side of the ethical line and isn’t willing to address the issues despite your best efforts to get him or her to do so, you’ve got a choice — keep quiet and keep working, or find another job that allows you to do meaningful work without compromising your ethics. You know what you have to do.

Be proactive and be honest
If you fear something is going to come under the microscope of media scrutiny, put a plan together immediately for dealing with it. Decide who will be your spokesperson(s) and what the talking points are. Write up responses for your donor service team members, and explain the situation to them so they can honestly be your advocates if and when they receive questions. Being caught off guard when a donor calls is embarrassing for your team members and can be devastating if they accidently blurt out bad information.

If you made a mistake, be prepared to admit it. Denial or vague responses will backfire. I take a three-pronged approach to problems: Figure out what went wrong. Figure out how to fix it. Then figure out how to keep it from ever happening again. This approach recognizes that mistakes happen, but it proactively looks to keep them from happening twice.

Unfortunately, every time a major scandal in the nonprofit world makes it to the mainstream media, we feel the pain. The latest one is no exception. So, accept the reality, and then get to work to minimize your exposure.

We can’t control what others are doing, but we can make sure what we are doing is squeaky-clean. At least then it will be easier to avoid shrapnel from the battle raging around us.

Originally published in NonProfit Pro.

Author: PJBarden

With a professional career in strategic fundraising that spans more than 35 years, Pamela brings a wealth of experience and knowledge to working with nonprofit organizations. She specializes in writing fundraising copy, grant proposals, P.R. materials, instructional articles and blog entries, as well as developing and executing fundraising strategy for her clients. Pamela is a Certified Fundraising Executive (CFRE); an instructor for UCLA Extension School’s Fundraising Certification Program and the University of La Verne, College of Business and Public Management; a frequent webinar speaker; and author of two online courses for UCLA Extension. Pamela earned a Doctorate of Business Administration in 2015; her doctoral project (dissertation) was entitled “Nonprofit Organizations’ Awareness of and Preparation for Legislation, Regulation, and Increasing Scrutiny.” She is a past winner of a Gold Award for Fundraising Excellence and an ECHO Award from DMA; recipient of a Distinguished Instructors Award from UCLA Extension; a weekly columnist for NonprofitPRO (formerly Fundraising Success); and a monthly contributor to Blackbaud’s blog, npEngage.

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